CBN denies imminent shutdown of 600 Microfinance banks

sanusi-lamido newThe Central Bank of Nigeria CBN has refuted a recent newspaper story insinuating that 600 microfinance banks (MFBs) were facing imminent shutdown.
Reacting to the report which the apex bank described as false, the CBN Director, Other Financial Institutions Supervision Department (OFISD), Mr. Olufemi Fabamwo said that the bogus and spurious claims made in the report defied the usual professional ethics of factual and balanced reporting, which are the hallmarks of finance and business journalism.
Dismissing the story as totally untrue and misleading, Fabamwo reaffirmed unequivocally that the CBN is generally satisfied with the state of the microfinance industry and the financial condition of the MFBs, adding that the story of the imminent shut down of 600 MFBs should be ignored.
He noted that it leaves much to be desired that the reporter never bothered to crosscheck the story with CBN Corporate Communications Department or any other relevant authority.
Mr. Fabamwo further stated that such a callous and rash misinterpretation of the policy direction in the microfinance sub-could obviously result in the de-marketing of microfinance banks and thus, undermine public confidence which is capable of precipitating panic withdrawals by depositors and investors in the MFBs.
He therefore urged members of the public to ignore and disregard the false story, noting that the microfinance sub-sector has been effectively regulated by the CBN and jointly supervised by the CBN and the Nigeria Deposit Insurance Corporation (NDIC).
He added that all MFBs are examined at least once a year, while some are examined more than once, depending on the exigencies of the situation, with follow-up visits to ensure that examiners’ recommendations are implemented and corrective actions are taken by the operators of the MFBs in order to engender stability in the microfinance space.
He advised the investing public and depositors of microfinance banks to ignore the story as an attempt to subvert the development of the nascent microfinance industry in Nigeria and solicited for their unwavering support to the microfinance industry.

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