MICROFINANCE POLICY, REGULATORY AND SUPERVISORY
FRAMEWORK FOR NIGERIA
CENTRAL BANK OF NIGERIA,
ABUJA,
DECEMBER 2005
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TABLE OF CONTENTS
1.0 INTRODUCTION 1
2.0 OVERVIEW OF MICROFINANCE ACTIVITY IN NIGERIA 2
3.0 JUSTIFICATION FOR ESTABLISHMENT OF MICROFINANCE
BANKS 4
3.1 Weak Institutional Capacity 4
3.2 Weak Capital Base 4
3.3 The Existence of a Huge Un-Served Market
4
3.4 Economic Empowerment of the Poor, Employment Generation
and Poverty Reduction 5
3.5 The Need for Increased Savings Opportunity 5
3.6 The Interest of Local and International Communities in Microfinancing 6
3.7 Utilization of SMEEIS Fund 6
4.0 THE MICROFINANCE POLICY 6
4.1 Policy Objectives 6
4.2 Policy Targets 7
4.3 Policy Strategies 7
5.0 GOALS OF THE MICROFINANCE BANKS 8
6.0 POLICY MEASURES AND INSTRUMENTS IN THE ESTABLISHMENT
OF THE FRAMEWORK FOR MICROFINANCE BANKS 9
7.0 ORGANIC GROWTH PATH FOR MFBs 10
8.0 OWNERSHIP OF MICROFINANCE BANKS 11
9.0 PARTICIPATION OF EXISTING FINANCIAL INSTITUTIONS
IN MICROFINANCE ACTIVITIES 11
9.1 Universal Banks 11
9.2 Community Banks 11
9.3 Non-Governmental Organization-Microfinance Institutions 12
9.4 Transformation of Existing NGO-MFIs 12
10.0 JUSTIFICATION FOR THE CAPITAL REQUIREMENTS 12
11.0 FRAMEWORK FOR SUPERVISION OF MICROFINANCE BANKS 13
11.1 Licensing and Supervision of Microfinance Banks 13
11.2 Establishment of a National Microfinance Consultative Committee 13
11.3 Credit Reference Bureau 14
11.4 Rating Agency 14
11.5 Deposit Insurance Scheme 14
11.6 Certification Process 14
11.7 Apex Associations of Microfinance Institutions 15
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11.8 Linkage Programme 15
11.9 Establishment of a Microfinance Development Fund 15
11.10 Prudential Requirements 15
11.11 Disclosure of Sources of Funds 15
11.12 Corporate Governance for Microfinance Banks 15
12.0 REGULATORY INCENTIVES 16
13.0 ROLES AND RESPONSIBILITIES OF STAKEHOLDERS 16
13.1 Government 16
13.2 Central Bank of Nigeria (CBN) 17
14.3 Micro-Finance...