The Central Bank of Nigeria (CBN) has threatened to sanction microfinance banks (MBAs) engaging in activities beyond the scope of their operating licence.
In a circular dated August 19, 2021, CBN said it had observed that some microfinance banks were endangering the economy by engaging in activities like foreign exchange and wholesale banking.
“Given the comparatively low capitalization of MFBs, dealing in wholesale and/or foreign exchange transactions are a significant risk with dire consequences for financial system stability,” the circular reads in part.
“It has, therefore, become imperative to remind all MFBs to strictly comply with the extant Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria 2012 (The Guidelines).”
The apex bank said it would continue to monitor the growth of the MFB sector and impose harsh regulatory penalties, including canceling licenses of non-compliant MFBs, for violation of existing rules.
Be the first to receive special investigative reports and features in your inbox.