CBN to liquidate 83 Microfinance Banks

The Central Bank of Nigeria (CBN) is set to liquidate no fewer than 83 licenced microfinance banks (MFBs) in the country, following a recent discovery that the financial institutions were merely set up to defraud Nigerians.

The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, made this disclosure yesterday while appearing before the Senate Committee on Banking, to defend the corporation's 2014 budget.

Ibrahim who also highlighted plans to regulate mobile banking in the country with a view to curbing fraudulent practices by operators in both the banking and telecoms sector, added that the 83 MFBs lacked the required stamina to survive.

While disclosing that as many as 900 MFBs operate in different parts of the country, Ibrahim explained that 83 of them would be liquidated because they "existed only on paper while some are used to defraud Nigerians."

He also noted that NDIC had put machinery in place towards determining the number of depositors in microfinance sector as well as how much of depositors’ funds are with such banks.

He added: "Some assets of the banks will also be sold. There is no doubt that operations of some of the microfinance banks have become epileptic."

Ibrahim also told the committee that a whopping N105 billion had been provided in the 2014 budget with the intention to pay off depositors of MFBs to be liquidated.