Licence Revocation: MFBs assure safety of ‘depositors’ fund

*Joshua Ukute, President of the Association of Microfinance Banks, assures the depositors’ funds are secured, as protected by the Nigeria Deposit Insurance Corporation

Isola Moses | ConsumerConnect

Sequel to revocation of operating licences of some Microfinance Banks (MFBs) by the Central Bank of Nigeria (CBN), Joshua Ukute, President of the Association of Microfinance Banks, said that customers’ money is well-secured in the financial institutions. Ukute, who stated this while featuring in an interview on Channels TV, and monitored in Lagos, disclosed the association is working with the banking sector regulators and the affected Microfinance Banks for a proper winding down.

The President of the Association noted: “We know that the Central Bank had since 2019 given instruction to Microfinance Banks to recapitalise and then after, when we came on board a lot of issues about COVID, post-COVID and a lot of other challenging issues.

“But as an association, we are working with various regulators and the banks affected… If you look at that list, a lot of microfinance banks are on that list owing to a lot of challenges like the economy, managing their businesses just like any other businesses are struggling for a while.”

Ukute further assured concerned consumers: “Microfinance Banks are regulated by the Central Bank of Nigeria and the NDIC (Nigeria Deposit Insurance Corporation), so their funds are well-secured under the deposit insurance covered by NDIC.

“So, definitely no depositor should lose their fund.”

ConsumerConnect had reported the CBN recently revoked the operating licences of 132 Microfinance Banks, four primary mortgage banks, and three finance companies in the Nigerian economy.

Information on the revocation exercise is contained in the official gazette of the Federal Government published on the Bank’s corporate Web site published Tuesday.

The Bankers’ Bank said the affected financial institutions had “failed to fulfil or comply with the conditions subject to which their licences were granted; or failed to comply with the obligations imposed upon them by the Central Bank of Nigeria in accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No.5.”