According to a report by the Central Bank of Nigeria on ‘Microfinance Banks’ Account Assets’ quarterly, the total assets of Nigeria’s microfinance banks increased to N1.35 trillion by the end of September 2021.
This is from N856.3 billion recorded in September 2020.
Also, figures obtained from the CBN on ‘List of Licensed Microfinance Banks’ showed that the number of microfinance banks rose from 876 as of June 30, 2021 to 882 as of December 31, 2021.
The CBN had, in October 2018, ordered the MfBs to shore up their capital.
In a circular to the MfBs, the CBN said the banks were contending with challenges such as inadequate capital base, weak corporate governance, ineffective risk management practices, dearth of requisite capacity and mission drift.
It urged them to explore the possibilities of mergers and acquisitions and direct injection of funds.
While the new capital took effect for new application for MfBs licences, existing banks were given till April 2020 to meet the new requirement.
However, in April 2020, the CBN, in consideration of the impact of the COVID-19 pandemic on economic activities, revised the deadline for compliance with the minimum capital requirements for the MfBs.
The banking regulator communicated this in a circular with reference number FPR/DlR/GEN/ClR/07/054 entitled ‘Re: Review of minimum capital requirements for microfinance banks in Nigeria’.
The circular read in part, “The Central Bank of Nigeria has extended the deadlines for compliance with the revised minimum capital requirements for all categories of the MFBs by one year as follows:
“The MFBs operating in rural, unbanked and under-banked areas (Tier two) shall meet the N35m capital threshold by April 2021 and N50m by April 2022.
The MFBs operating in urban and high-density banked areas (Tier one) are expected to meet the NI00 million capital threshold by April 2021 and N200 million by April 2022.
“State MFBs shall increase their capital to N500m by April 2021 and N1bn by April 2022.
“And national MFBs are expected to meet minimum capital of N3.5bn capital by April 2021 and N5bn by April 2022.”