The International Centre for Islamic Culture and Education (ICICE) has appealed to the Central Bank of Nigeria (CBN) to review the recent increase of minimum capital base of Microfinance Banks.
The Director-General of ICICE, Dr Kabir Usman, in a letter dated Feb. 6, written to the CBN Governor, described the CBN decision as “injurious to the industry”.
He stated that the feedback from a survey conducted by the centre on the policy shows that majority of the stakeholders are unsatisfied with the decision.
“Raising the capital base of microfinance banks by 1000 per cent as contained in the CBN’s circular issued on Oct. 22, 2018 shows that majority of the stakeholders are discontented
with the decision.’’
He listed the challenges and risks associated with the operations of the microfinance banks to include, capital base, corporate governance and compliance issues, lack of awareness by beneficiaries and insider abuses.
“Increase in the capital base from N20 million to N200 million will not address the challenges either.
“We recommend a review of the capital base from the current N20 million to N50 million, compulsory basic training for all microfinance banks key staff as a pre-condition to the issuance of operating license.
“We recommend strict compliance to corporate governance in the organisational structure of the banks and regular town-hall meeting with the beneficiaries at their localities,’’ Usman said.
The News Agency of Nigeria (NAN) reports that the letter was copied to the Minister of Finance and the Managing-Director of the Nigerian Deposit Insurance Corporation.