The Central Bank of Nigeria (CBN) has extended the deadlines issued to Microfinance banks (MfBs) to recapitalise their capital base.

In a circular issued to all microfinance banks on April 29, 2020, and signed by the CBN’s Director, Financial Policy and Regulation Department, Kevin Amugo, the CBN said it decided to extend deadlines for compliance with the minimum capital requirements for Microfinance Banks (MfBs) in Nigeria due to the impact of the coronavirus on the country’s economy.

It stated further: “Consequently, the CBN has extended the deadline as follows:  MfBs operating in rural, unbanked and underbanked areas (Tier 2) shall meet the N35 million capital threshold by April 2021 and N50 million by April 2022.

“MFBs operating in urban and high-density banked areas (Tier 1) are expected to meet the N100 million capital threshold by April 2021 and N200 million by April 2022.

“State MFBs shall increase its capital to N500 million by April 2021 and N1 billion by April 2022.

National MFBs are expected to meet the minimum capital of N3.5 by April 2021 and N5 billion by April 2022.”

The CBN had in March 2019, reviewed the minimum capital requirement for microfinance banks, to ensure continued operations of these banks in rural, unbanked and underbanked areas of the economy.

CBN will need to extend MfBs recapitalization- Vice-Chairman, NAMB, Ogun chapter

The vice-chairman, National Association of Microfinance Banks (NAMB), Ogun State chapter, Mr Sodiya Ajani has called on the CBN to extend the deadline of the microfinance bank recapitalisation due to the COVID-19 lockdown.

According to him, “Definitely, the recapitalization exercise by the BN will be affected by the lockdown. Firstly, the processing of the exercise will be affected. CBN gave us April 2021 but nothing has been done to that effect.

“The apex bank management is aware of the current situation and there is a need for them to give the MfBs time to meet up. Without the Covid-19, MfBs were struggling not to mention the negative Covid-19 has done to the sector for weeks now.”

Meanwhile, the apex bank at the midweek announced the resumption of the sale of foreign exchange to all commercial banks for onward sales to parents to pay schools fees and operators of small and medium scale enterprises (SMEs) wishing to make essential imports needed to revamp economic activities across the country.

The CBN in a statement said the decision was arrived at, because of the gradual easing of the COVID-19 lockdown both globally and in Nigeria the country.

“In particular, the CBN is resuming the provision of over US$100 million per week for both categories. The CBN has also made complete arrangements to resume foreign exchange sales to the Bureau De Change segment of the market for business travels, personal travels, and other designated retail uses, as soon as international flights resume.

“With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users and our continued capacity to do so should not be in doubt. There is, therefore, no need for panic by an end-user that could necessitate recourse to illegitimate sources and spike in foreign exchange rates.

“Given this, the Bank has ramped up its surveillance of the foreign exchange markets for speculators, smugglers and other illegal users, and will take decisive actions against anyone/institutions involved in such nefarious activities,” the bank explained.