CIBN Cautions MFBs over Loans’ Disbursement

The Chartered Institute of Bankers of Nigeria (CIBN) has cautioned operators of microfinance banks (MFBs) in the country against giving out loans beyond their capacity. The institute also advised operators of MFBs not to emulate and carry out transactions and loan disbursements as commercial banks.

President, CIBN, Mrs. Debola Osibogun said this on Wednesday when she paid a courtesy visit to Accion Microfinance Bank Limited’s head office in Lagos.
She said: “As long as the microfinance banks do not behave as if they are commercial banks, they would not have much problem. Their area is different and the sector they are is different from what commercial banks are expected to service."

She added: “If micro finance banks keep giving out huge sums of money to individuals then they might be running some risks. But when you give small sums of money to a large number of people, the risk is still not as high as when you give a lump sum to one person."

She also commended the bank for accessing part of the Central Bank of Nigeria’s (CBN’s) N220 billion intervention fund for micro, small and medium scale enterprises (MSMEs).

The CIBN boss added: “On the issue of intervention fund, which the central bank has provided I am glad that she (Accion CEO, Bunmi Lawson) was able to inform us today that her organisation has been able to access this fund. “We could use that to encourage other microfinance banks to try and access the fund. It is for the benefit for people who do not have access to corporate finance.”

She further said: “I believe some of the microfinance banks must have gotten their hands burnt but the people like Accion that are doing the right thing and concentrating on the grassroots, you can see that they are progressing. “I would advise that other micro finance banks to emulate what they are doing and they should make sure they don’t play in the same field as the commercial banks.”

Also speaking at the event, Lawson said Accion microfinance was pleased to be recognised by the CIBN for its efforts in the industry.

“As the bank is expanding across Nigeria, we will continue to provide sustainable financial services to reach the unserved and underserved in the country,” she added.