News Column

We're satisfied with microfinance banks' status –CBN

February 18, 2014

Our Reporter

The Central Bank of Nigeria (CBN), Tuesday, expressed satisfaction with the financial conditions of the nation's microfinance banks, stressing that news report that 600 microfinance banks (MFBs) would be shutdown was untrue.

Reacting to the report, the CBN Director in charge of Other Financial Institutions Supervision Department (OFISD), Mr. Olufemi Fabamwo, said the bogus and spurious claims made in the report defied the usual professional ethics of factual and balanced reporting, which are the hallmarks of finance and business journalism.

Fabamwo who dismissed the story as totally untrue and misleading, however, reaffirmed that the CBN was generally satisfied with the state of the microfinance industry and the financial condition of the MFBs, adding that the story should be ignored.

He further stated that such misinterpretation of the policy direction in the microfinance sub-sector could result in the de-marketing of microfinance banks and thus, undermine public confidence, which is capable of precipitating panic withdrawals by depositors and investors in the MFBs.

The CBN director urged members of the public to ignore and disregard the story, noting that the microfinance sub-sector has been effectively regulated by the CBN and jointly supervised by the CBN and the Nigeria Deposit Insurance Corporation (NDIC).

According to him, all MFBs are examined at least once a year, while some are examined more than once, depending on the exigencies of the situation, with follow-up visits to ensure that examiners' recommendations are implemented and corrective actions are taken by the operators of the MFBs to engender stability in the microfinance space.

He advised the investing public and depositors of microfinance banks to ignore the story as an attempt to subvert the development of the nascent microfinance industry in Nigeria and solicited for their unwavering support to the microfinance industry.

The post We're satisfied with microfinance banks' status CBN appeared first on The Sun News.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Sun, The (Nigeria)

Story Tools