Proshare Logo
   Market Date: 27-01-2015   
Agriculture ARTS FINANCE All One Min News Archives Bonds Cap Mkt Sentiments Capital Market CASHLESS NIGERIA Commodities Corporate Earnings Daily & Weekly Market Updates Elections Enterpreneurship ETFs Forex Frauds & Scandals General Global Market Insurance Investors NewsBeat Islamic Finance Mergers & Aquisitions Money Market Mortgage Mutual Funds Nigeria Economy Oil Sector Opinions and Analysis Pensions People Personal Finance Politics Power Products & Services Professionals Property Public Offers Private Placements Regulators REITs Stock PICKS Taxation Telcos Travel & Tours Unlisted OTC MARKET World of Business

NDIC Suggests Mergers, Acquisitions for MFBs

Category: Regulators

  Read (2961)
NDIC Suggests Mergers, Acquisitions for MFBs

December 1, 2011

As part of efforts to enhance the operations of microfinance banks (MFBs), the Nigeria Deposit Insurance Corporation (NDIC) Tuesday suggested mergers and acquisitions (M &As) option for operators in the sub-sector.

The corporation also advised operators to diligently work towards the implementation of the Revised Microfinance Policy and other reform initiatives that had been put in place by the regulators.

Director, Special Insured Institutions Department, NDIC, Mr. B. D Umar, made this call in a paper presented at a conference for journalists, organised by the corporation in  Dutse, Jigawa.

Umar, whose speech was titled: “The Impact of Microfinance Sub-sector in Promoting Financial Inclusion in Nigeria,” also advised that the introduction of  Differential Premium Assessment System (DPAS) in the sub-sector should be given priority attention.

He explained: “Mergers and acquisitions as opposed to outright liquidation should be encouraged in the sub-sector as obtains in other jurisdictions like Germany where no Cooperative Bank (equivalent of an MFB) has failed in the past 50 years). We were able to establish that so far, MFBs in Nigeria have generally performed sub optimally even if they are assailed by some operational challenges. We noted that the reform of the sub sector is currently receiving the priority attention of stakeholders particularly the Central Bank of Nigeria (CBN) and the NDIC so as to reposition it for enhanced service delivery.

“One of the reform initiatives is the recent revocation of the operating licences of some MFBs. The recent comprehensive review of the Microfinance Policy, which led to approval of the apex bank of a Revised Microfinance Policy is yet another major reform initiative.”

He pointed out that the skewed distribution of MFBs in Nigeria was capable of limiting access of a vast majority of the economically active poor to credit, even as he argued that in some part of the country where sizable numbers of MFBs were present, most of the institutions were located in urban places to the neglect of the rural areas because of pure profit making considerations

“Another challenge of the subsector is lack of relevant skills.

Microfinance banking is different from conventional banking. Microfinance banking involves the provision of financial services to the lower segment of the market. Microfinance banking, therefore, requires specialized skills which are presently lacking in the country.

“Many operators with community banking background still run their businesses as if they were community banks while quite a number of them also see themselves as competitors to Deposit Money Banks,” he added.

Source: Thisday

Tags: , 

Comment With Your Facebook or Yahoo! ID

Latest news

News on Regulators

About Us

Who We Are
Our Team & Partners
Corporate Governance
Advertise with Us
Subscribe / Unsubscribe
Site Map
News Feed - RSS
Contact Us
Volunteer Program
Message from CEO

News & Features
The Analyst / Market Data
Investor Relations Portal
The Regulator
Economy & Politics
Training Portal
Events Calendar
NewsStands - Online Reputation

Products and Services

Research & Market Intelligence
Analyst Services
Offers & Rights Support Service
Investor Relations Services
Alert & Subscription Services
Share Support Services
Proshare Consult
Event & Seminar Coverage
Market Directory
File a Complaint
News & Analysis

News from TheANALYST
Video News from WebTV
Money Market Updates
Opinions & Analysis
Nigerian Economy
Market Data
The Regulator
Discussion Forum

Subscriber Agreement
Privacy Policy
Data Policy
Copyright Policy
Comments in Site
Advertising Code
Conflict of Interest
Content Partnership
3rd Parties

Online Trading and Execution
Legal Support Services
Web/Technology Services
File a Complaint

CBN Governor 2014