On July 9, 2012 ? In Finance

BY PROVIDENCE OBUH

Microfinance Banks in the country have called on the Central Bank of Nigeria (CBN) to extend the deadline for recapitalisation by one year and also review policies affecting the sub-sector.

It would be recalled that the CBN had given all microfinance banks till December 31, 2012 to comply with the revised policy framework

The MFBs however asked the apex bank to extend the deadline to December 31st 2013, so as to allow enough time to either recapitalise or enter into merger and acquisition.

This was contained in a communiqu? issued by participants at the just concluded microfinance certification programme of non-executive directors of microfinance banks organised by CBN, NDIC and FITC in Lagos.

The communiqu? stated, ?The fact that the EFCC considers most of the fraud cases affecting microfinance banks to be below its threshold have emboldened perpetrators of fraud against the sub-sector to continue to exploit the endless adjournment in conventional courts .

?There should be further review of some aspects of the regulatory guidelines and policies as follows; sanctions for infringements regarding submission of monthly returns, annual reports etc to be reviewed downward for microfinance banks and to be imposed only after enough warnings have been given, corporate tax for microfinance banks to be reduced to 20 per cent officially with special additional concessions because of the social nature of the business, and single obligor for microfinance banks to be increased to five per cent and 10 per cent for individual and corporate borrowers respectively.?

?The CBN should promote the enactment of a personal securities registration law for personal chattels and movable assets to enhance the security of microfinance bank loans, usually secured by personal and movable assets.

?The CBN should promote the enactment of an effective personal bankruptcy and business rescue laws for individuals as most microfinance bank customers were individuals and not companies.?

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