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Central Bank of Nigeria (CBN) Approves Conversion of Community Bank into Microfinance Institution (MFI)

Guest post by: David Satterthwaite

Article Overview: The Central Bank of Nigeria (CBN) has approved the conversion of the Olabisi Onabanjo University Community Bank Limited into a microfinance bank. The community bank has operated on the campus of Olabisi Onabanjo University in Ago-Iwoye, Nigeria since March of 2003, and the majority of its shareholders are affiliated with the university. One source reports that, in its first year in business, the bank made a surplus that was “far in excess of its total paid up capital,” but no other sources were found to corroborate this information and no further information was found on the OOU Community Bank.

Central Bank of Nigeria (CBN) Approves Conversion of Community Bank into Microfinance Institution (MFI)

The Central Bank of Nigeria (CBN) has approved the conversion of the Olabisi Onabanjo University Community Bank Limited into a microfinance bank. The community bank has operated on the campus of Olabisi Onabanjo University in Ago-Iwoye, Nigeria since March of 2003, and the majority of its shareholders are affiliated with the university. One source reports that, in its first year in business, the bank made a surplus that was “far in excess of its total paid up capital,” but no other sources were found to corroborate this information and no further information was found on the OOU Community Bank.

The CBN, which had NGN 5.7 billion (USD 45.6 million) in total assets as of November 2006, has stipulated that full certification to operate as a microfinance institution is contingent on the bank fulfilling a set of conditions. Some such conditions include submitting the names and curriculum vitae of the management team to the CBN for approval, upgrading the computer system’s management software, and submitting a true copy of the certificate of incorporation of the MFI issued by the Corporate Affairs Commission of Nigeria, a federal body which regulates the formation and management of private companies. In addition, once formed, the OOU microfinance bank must register with the Microfinance Bank Association of Nigeria, a network of Nigerian microfinance institutions (MFIs).

Currently, there are only eight Nigerian microfinance providers that report to the Microfinance Information eXchange (MIX Market). Based on their reports, the combined gross loan portfolio is just under USD 12 million, and there are about 250,000 active borrowers in the country. The CBN estimates that at least 40 million Nigerians may require microfinance services.

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Article Tags: bank of nigeria, borrowers, central bank of nigeria, central bank of nigeria cbn, certificate of incorporation, community bank, corporate affairs commission, corporate affairs commission of nigeria, curriculum vitae, gross loan, information exchange, loan portfolio, mfi, microfinance institutions, nigerians, olabisi onabanjo university, oou, private companies, source reports, true copy



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