Home BusinessBanking Nigeria: Microfinance Banks Seek Extension of Recapitalisation Deadline

Nigeria: Microfinance Banks Seek Extension of Recapitalisation Deadline

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In the alternative, banks ask the Central Bank of Nigeria to reducing the capital requirement amount.

Microfinance banks in Nigeria will not be able to meet up with recapitalisation requirement of the Central Bank of Nigeria, within the proposed time, because of the effect of the coronavirus pandemic on the economy, an official has said.

Yusuf Gyallesu, National President of the National Association of Microfinance Banks (NAMB), said this, according to BusinessDay newsaper.

Mr Gyallesu sought the CBN to reconsider its minimum capital requirement for the banks, and called on the top bank to extend the deadline for compliance.

The CBN had in March 2019 reviewed the requirements with a view to ensuring continued operations of microfinance banks in rural, unbanked and underbanked areas of the economy.

After the review, the minimum share capital for MFBs, as of April 2021, ranged from N35 million to N3.5 billion, depending on the category.

Mr Gyallesu said the microfinance banks had challenges raising the capital.

“We are advocating through different sources to see how the CBN can shift ground by reducing the capital requirement amount or extending the tenure of the deadline,” he was quoted by BusinessDay. as saying.

“So within this COVID-19 period, where can one go to raise 1, 000 percent of the reviewed capital” he was quoted as saying.

The apex bank had earlier extended the deadlines issued to the banks to comply with its revised minimum capital requirements.