The Central Bank of Nigeria (CBN) has extended the deadlines for compliance with the revised minimum capital requirements by Microfinance Banks (MFBs) in the country.
This is contained in a circular to all microfinance banks dated April 29 and signed by the Director of CBN Financial Policy and Regulation Department, Kevin Amugo.
Amugo noted that the apex bank had issued a set of deadlines in an earlier circular dated March 7, 2019.
He explained that the review was a result of the effect of the coronavirus (COVID-19) pandemic on economic activities in the country.
According to the CBN official, the new directive affects microfinance banks operating in rural, unbanked and under-banked areas, urban and high-density banked areas, as well as the state and national MFBs.
The circular issued by the apex bank read thus:
‘’The Central Bank of Nigeria in consideration of the coronavirus (COVID-19) pandemic on economic activities has revised the deadlines for compliance with the minimum capital requirements for Microfinance Banks (MFBs) in Nigeria communicated vide its circular dated March 7, 2019 referenced FPRD/DIR/GEN/CIR/07/024.
‘’Consequently, the CBN has extended the deadlines for the compliance with the revised minimum capital requirements for all categories of MFBs by one year as follows:
- MFBs operating in rural, unbanked and under-banked areas (Tier 2) shall meet the N35 million capital threshold by April 2021 and N50 million by April 2022;
- MFBs operation in urban and high-density banked areas (Tier 1) are expected to meet the N100 million capital threshold by April 2021 and N200 million by April 2022;
- State MFBs shall increase their capital to N500 million capital threshold by April 2021 and N1 billion by April 2022; and
- National MFBs are expected to meet minimum capital of N3.5 billion capital by April 2021 and N5 billion by April 2022.