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‘Depositors’ Fund Well-Secured’, Microfinance Banks React To CBN’s Revocation



President of the Association of Microfinance Banks, Joshua Ukute

Amid the revocation of the operating licence of some microfinance banks by the Central Bank of Nigeria (CBN), the President of the National Association of Microfinance Banks, Joshua Ukute has assured depositors that their money is well-secured.

In an exclusive interview with Channels Television, Ukute said the association is working with the regulators and the affected microfinance banks for a proper winding down.

“We know that the Central Bank had since 2019 given instruction to microfinance banks to recapitalise and then after, when we came on board a lot of issues about COVID, post-COVID and a lot of other challenging issues,” he said.

“But as an association, we are working with various regulators and the banks affected… If you look at that list, a lot of microfinance banks are on that list owing to a lot of challenges like the economy, managing their businesses just like any other businesses are struggling for a while.

“Microfinance banks are regulated by the Central Bank of Nigeria and the NDIC (Nigeria Deposit Insurance Corporation), so their funds are well-secured under the deposit insurance covered by NDIC. So, definitely no depositor should lose their fund.”

The apex bank had revoked the operating licences of 132 microfinance banks, four primary mortgage banks, and three finance companies in the country.

Channels Television reported that the revocation exercise was disclosed in the official gazette of the Federal Government published on the website of the CBN on Tuesday.

The apex bank said the financial institutions “failed to fulfil or comply with the conditions subject to which their licences were granted; or failed to comply with the obligations imposed upon them by the Central Bank of Nigeria in accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5″.

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