N18 Billion Loss - CBN, NDIC Restoring Confidence in MFBS -Fortis

By revoking the operating licences of 224 Micro Finance Banks (MFBs), the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance are restoring confidence in MFBs in Nigeria, Executive Director, Fortis MFB, Mr Henry Nwawub has said.

The CBN on Friday revoked the operating licences of 224 small banks, saying they could not honour their obligations to depositors whose N18.2billion are trapped in the banks. The names of their managements have been forwarded to the law enforcement agencies for investigation and prosecution.

A CBN/NDIC examination of 820 MFBs in Nigeria, found 224 to be either terminally distressed or technically insolvent and had closed shop for the last six months

Mr. Nwawub said the move would help sanitise the sector and boost depositors' confidence.

Executive Director of Fortis MFB Mr Henry Nwawuba told newsmen that the move will make operators see the huge potentials of the sector towards growing the economy from bottom-up. He said Fortis awareness campaign through the disbursement of about N3bn micro-credit facility has boosted the operation of about 35, 000 micro and medium enterprises in the FCT and environs.

He said: "Microfinance awareness is gradually increasing because we have had business growing their loans from N20, 000 to over N300, 000."