CBN rebuts report of looming shutdown of 600 microfinance banks

On Tuesday, the Central Bank of Nigeria CBN rebutted a recent report that 600 microfinance banks (MFBs) were facing imminent shutdown. 

Centra Bank of Nigeria Headquarter in FCT Abuja

 In a statement by the apex bank, its Director, Other Financial Institutions Supervision Department (OFISD), Mr. Olufemi Fabamwo said the story was “totally untrue and misleading”.

Fabamwo stated that the CBN was generally satisfied with the state of the microfinance industry and the financial condition of the MFBs, adding that the story of the imminent shut down of 600 MFBs should be ignored.

He submitted that such misinterpretation of the policy direction in the microfinance sub-could obviously result in the de-marketing of microfinance banks and thus, undermine public confidence which is capable of precipitating panic withdrawals by depositors and investors in the MFBs.

He then urged members of the public to ignore and disregard the story, noting that the microfinance sub-sector had been effectively regulated by the CBN and jointly supervised by the CBN and the Nigeria Deposit Insurance Corporation (NDIC).