By Adaku Onoja
International Centre for Islamic Culture and Education, ICICE
In the letter with reference number ICICE/CBN/MFB/0602/01 dated 6th February, 2019 addressed to the Governor of the CBN, the centre said feedback from a survey it conducted on the policy of raising the capital base of micro finance banks by 1,000% contained in the CBN’s circular issued on 22nd October, 2018 shows majority of the stakeholders are discontented with the decision which it said will be “injurious to the industry”.
A statement issued in Abuja and signed by Special Adviser on Media and Publicity to Director General, ICICE , Abdulkadir Ahmed Ibrahim said the letter, signed by the Director General of the ICICE, Dr Kabir Kabo Usman, acknowledged the challenges and risks associated with the operations of Micro Finance Banks including the capital base, corporate governance and compliance issues, lack of awareness by the beneficiaries and insider abuses among others which led to many to become insolvent.
It however argued that increasing the capital base from N20million to N200million will not address the challenges either.
It recommended for a review of the capital base from the current N20million to N50million, compulsory basic training for all MFBs key staff as a pre-condition to the issuance of operating license, strict compliance to corporate governance in the organizational structure of the MFBs and regular “town-hall” meeting with the beneficiaries at their localities.
The statement said the letter was copied the Minister of Finance and the Managing Director of the Nigerian Deposit Insurance Corporation, NDIC.
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