Depositors of troubled microfinance banks have called on the Central Bank of Nigeria to urgently address the issue of trapped funds in the banks while pursuing the planned reforms of the sector.
Some of the depositors, who spoke in separate interviews with our correspondent on Tuesday, said they had been denied access to their fund for almost two years, adding that the closure of some of the banks was not helping matters, but compounding the woes of depositors, who no longer had access to the managers of the banks.
A private secondary school teacher in Lagos State, who asked not to be named, said her N250,000 was trapped in Integrated Micro Finance Bank Plc, adding that efforts to withdraw even part of the money had proved abortive. She said although the CBN had said that it would put in place far reaching reforms in the sector, this would do nothing to ease the pains of many depositors of failed MFBs, who had been denied access to their funds as a result of ”recklessness on the part of the managements of the banks.”She said that regulators must help depositors to recover their money.
Another depositor with IMFB, a medical doctor practising in Lagos, narrated her experience with the bank, saying that she never believed that IMFB, which before now, had been paraded as the leading MFB in Nigeria, could find it difficult to pay a paltry N50,000. She said she had a deposit of N200,000 with the bank and wanted to collect some of it, but was shocked when a N50,000 Oceanic Bank cheque given to her by the bank on September 28, 2009, ”bounced”.
Some of the MFBs had been forced to close down, before CBN‘s intervention, as a result of protests by depositors while some others had wound up operations without paying customers off for liquidity reasons. About 2,000 depositors of Almon Microfinance Bank in Lagos, had also protested their inability to withdraw their money.
Some of the depositors, who spoke with our correspondent, also asked for a review of the regulatory process to forestall future reoccurrence of the current crisis. When contacted, the Managing Director, IMFB, Mr. Adamu Ibrahim, said the bank had gone through trying times in recent times, adding that funds could not be repaid until the bank became operational again.
He told our correspondent in a telephone interview on Tuesday that ”We have serious, committed investors willing to invest in the bank, but we are awaiting the CBN report on the bank to determine what happens next.”
He admitted that the bank could not pay N50,000 at the moment, saying, ”Even those owing us are not paying us because we are not operational, so we can‘t get it out. The CBN report is a requirement for any core investor to drop money because they must know the situation of things.” The board of directors of IMFB approved the appointment of Ibrahim after the former Managing Director of the bank, Mr. Simon Akinteye, resigned in the thick of the bank‘s financial crisis.
The bank had explained that the resignation of Akinteye was necessitated by efforts made by the board of the bank to raise fresh funds from both institutional and private investors in order to reposition it.
A statement from the bank had said that the board had concluded arrangements to inject over N1bn from internal sourcing and through partnership with two foreign investors to boost the bank‘s capital base and expand business operations.
At the last Committee of Microfinance Bank in Nigeria meeting, the CBN had said that the asset quality of many of the MFBs was worrisome, adding that in some, capital base had been eroded below the minimum required level of N20m with non-performing insider-related credits.
The problem in the sector, it said, could be traced to the large volume of non-performing credits and the backlog passed on from the community banking era.
When contacted, the Head, Corporate Affairs, CBN, Mr. Muhammed Abdullahi, said the CBN would do everything in its powers to ensure that the microfinance sector was also sanitised, saying it formed part of the apex bank‘s goals.
(Source:Punch)
