Nigeria: Sanusi Explains Delay in Microfinance Regulatory Framework
By Obinna Chima, This day Live
Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, has shed more light on the delay in the release of the proposed microfinance regulatory framework, saying the apex bank wants to ensure that its supervisory capacity is strengthened before it is released.
The regulator, who said this at a forum in Lagos, explained that although the regulatory framework was ready, he decided to step it down in order to confirm that the banking watchdog has the capacity to regulate the operators.
The proposed microfinance policy framework is expected to help address the misconception and proper understanding of microfinance concept, capital base, regulatory capacity framework and certification training among others.
It is also expected to make MFBs play their role in the financial inclusion drive of the CBN. The CBN had revoked the operating licences of some microfinance banks that were found to be terminally distressed and technically insolvent.
Sanusi explained: “The microfinance regulatory framework actually came to the last meeting of the Central Bank Board, but I stepped it down and the reason I did that was because we keep licensing institutions and regulating operators without asking if we have built the capacity to supervise them. If we are going to have 2000 microfinance institutions, I want to know that we have the capacity to regulate and supervise those institutions. So I was not satisfied that enough work has been done on that area.
The regulator noted that the move was to ensure that the challenges that affected the industry last year, do not recur.
“So the guidelines are there and we have we decided the module, but we have not released them because when we release them I want to make sure that the CBN is ready, not just to license and let them go, then after three, four or five years, you send in auditors,” he said.
It would be recalled that the CBN had given microfinance banks operating in the country a deadline of June 30, 2011, to acquire information technology infrastructure.
The apex bank had urged all microfinance operators to ensure compliance with the infrastructure platform by the end of June, stressing that such a platform will not only facilitate their operations but also assist in timely rendition of returns.