37 Micro Finance Banks May Lose Licences
About 37 microfinance banks (MFBs) in the country have been identified to be in a distressed position and may forfeit their operating licences.
The Chairman of the Nigeria Deposit Insurance Corporation (NDIC), Ronke Sokefun, made this disclosure at the weekend at an event organised by Babalakin & Co Legal Practitioners.
Sokefun, who was silent on the names of the 37 MFBs, said the financial institutions are currently unable to meet necessary regulatory conditions due to their weak positions.
She said, “The truth of the matter is that most of the MFBs and Primary Mortgage Banks (PMBs) don’t meet regulatory conditions. As at the end of first quarter, 37 MFBs were listed for closure.
“There is a clear indication of failure during the period, PMBs insured deposits of N112 billion but non-performing loans was N65 billion.
“They could no longer pay their depositors. There were issues of cessation of businesses and persistent non-rendition of monthly returns.”
Sokefun added that the MFBs did not meet the conditions set by the regulatory authorities in order to rescue them.
She also called for a timeline for the existence of any bridge bank.
“The bridge bank is a temporary arrangement meant to acquire the assets and liabilities of a failed bank, until a final resolution is achieved and to ensure stability in the financial system,” she stated.