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Saturday, August 7, 2021

Central Bank Draft Guidelines for the regulation and supervision of microfinance banks in Nigeria

The Central Bank of Nigeria (CBN) has published the Guidelines for the Regulation and Supervision of Microfinance Banks (the "Guidelines"), which took effect on April 1, 2020. The Guidelines will have an influence on the operations of various digital financial services offered by Microfinance Banks in Nigeria. 

Here are the salient features: 

Earlier there were three categories of licences (unit, state and national licences). However, with the current revision of the Guidelines, there are now the following four (4) categories: Tier 1 Unit, Tier 2 Unit, State and National. 

 Individuals, groups of individuals, community development associations, private business companies, and foreign investors may be awarded an MFB licence with a maximum shareholding of 49 percent for individuals and aggregate linked parties. 

As a result, no individual, group of individuals, their proxies, corporate entities, and/or their subsidiaries shall own controlling interest in more than one MFB, except as approved by the CBN. 

A financial holding company that intends to set up any category of MFB as subsidiary shall be required to meet the prescribed capital and other requirements stipulated in the CBN Guidelines for MFB. Such new subsidiary can only be registered with the CAC after obtaining the approval of CBN. 

 Read the complete Guidelines for the regulation and supervision of microfinance banks in 
Nigeria:
 

 Download your copy here: Central Bank of Nigeria https://drive.google.com/file/d/1KTAEQK7hgXzEEGET2IwI241hZI1tJ-mx/view?usp=sharing

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