The 224 Bad Micro Finance Banks in Nigeria

CBN
The Economic confidential produces below the text of the Press Conference by Deputy Governor of Cental Bank of Nigeria (CBN), Financial System Stability (FSS), Dr. Kingsley chiedu moghalu on the status of Microfinance Banks in Nigeria and whose licenses are recommended for revocation. The Nigeria Deposit Insurance corporation (NDIC) has however, immediately after suspended the banks.

1.  Background
The microfinance industry in Nigeria had been confronted with numerous challenges since the launch of the Microfinance Policy Framework in December, 2005. A significant number of the microfinance banks (MFBs), were deficient in their understanding of the microfinance concept and the methodology for delivery of microfinance services to the target groups. Many of them lost focus and began to compete with deposit money banks for customers and deposits, leaving their target market unattended, in spite of efforts of the regulatory authorities to put them back on track.

Unfortunately, the impact of the global financial crisis on MFBs had been more severe than anticipated. Credit lines dried up, competition became more intense and credit risk increased, as many customers of MFBs were unable to pay back their credit facilities owing to the hostile economic environment. The combination of these factors had significantly weakened the microfinance sub-sector and its ability to achieve the policy objective of economic empowerment at the lower end of the market.

Given this scenario and following market reports about the failure of some MFBs to meet their matured obligations as well as several petitions received from aggrieved depositors, the Central Bank of Nigeria (CBN) and Nigeria Deposit Insurance Corporation (NDIC) embarked on a Target Examination of all MFBs in Nigeria, to identify the problem and ascertain the scope as well as the extent of damage done to the affected institutions. The exercise started in February 2010 and was concluded in June 2010.

2.  Outcome of the Target Examination
The Target Examination was conducted on 820 MFBs across the country. A total of 224 (27%) MFBs were found to be ‘Terminally Distressed’ and ‘Technically Insolvent’ and/or had closed shop for at least six months.

The factors that contributed to the unsoundness of the MFBs were attributable to some or all of the following:

i)  High level of non-performing loans, resulting in high portfolio at risk (PAR), which had impaired their capital;
ii)  Gross undercapitalization in relation to the level of operations;
iii)  Poor corporate governance and incompetent boards;
iv)  High level of non-performing insider-related credits, and other forms of insider abuse;
v)  Heavy investments in the capital market, with the resultant diminution in the value of the investment after the meltdown;
vi)  Poor asset-liability management owing to portfolio mismatch;
vii)  Heavy investments in fixed assets beyond the maximum limit prescribed;
viii)  Operating losses sustained as a result of high expenditure on staff and other overheads;
ix)  Weak management evidenced by poor asset quality, poor credit administration, inadequate controls, high rate of fraud and labour turnover;
x)  Failure to meet matured obligations to customers.

3.  Regulatory Action Taken
i)  The operating licences of the 224 MFBs that were found to be ‘Terminally Distressed’ and ‘Technically Insolvent’ have been revoked pursuant to S.12 of BOFIA 1991 (as amended). The list of the affected MFBs is attached.
ii)  As insured institutions, NDIC in line with its statutory responsibility shall pay up to the maximum insurance coverage of N100,000 per depositor.
iii)  The bank directors and management of the closed banks that have abused their positions would be handed over to the Law Enforcement Agencies for investigation and prosecution, and those found culpable would be blacklisted accordingly.

4.  Concluding Remarks
Ladies and Gentlemen, the Regulatory Authorities hereby assure the public that they would not allow the activities of few individuals that ran their institutions aground to derail the noble objectives of the microfinance policy. All necessary steps have been taken to protect depositors of the affected banks.

Thank you for your attention.

Microfinance Banks whose Licences are recommended for revocation

S/N  Name of Microfinance Bank    State
1  ABIGI Microfinance Bank LIMITED   OGUN
2  ABIRIBA Microfinance Bank    ABIA
3  ACME TRUST Microfinance Bank   LAGOS
4  ADAIGBO Microfinance Bank    DELTA
5  ADIF Microfinance Bank    LAGOS
6  AFAM Microfinance Bank    RIVERS
7  AGBELO Microfinance Bank    EDO
8  AGULERI Microfinance Bank Ltd   ANAMBRA
9  AJASE-IPO Microfinance Bank    KWARA
10  AKESAN Microfinance Bank    OYO
11  AKIN Microfinance Bank CR.    RIVER
12  AKPOR-COE Microfinance Bank    RIVERS
13  AKUDIEWA Microfinance Bank    ENUGU
14  AKWENGWU Microfinance Bank   KOGI
15  ALLIANCE Microfinance Bank    ABUJA
16  ALLOVER Microfinance Bank LTD   LAGOS
17  ALSTAR Microfinance Bank LTD    LAGOS
18  ALTITUDE Microfinance Bank    LAGOS
19  AMAIFEKE Microfinance Bank    IMO
20  AMAZING GRACE Microfinance Bank   OGUN
21  APEX GOLDEN Microfinance Bank   LAGOS
22 APPLE Microfinance Bank LIMITED   OGUN
23  ASABARI Microfinance Bank    OYO
24  ASAGA-UKWU Microfinance Bank   ABIA
25  ASCENT Microfinance Bank    OGUN
26  ATTA NWAMBIRI Microfinance Bank   IMO
27  BABURA Microfinance Bank    EKITI
28  BALERA Microfinance Bank LTD    KADUNA
29  BARNAWA Microfinance Bank LTD   KADUNA
30  BERACHAH Microfinance Bank    LAGOS
31  BEULAH Microfinance Bank LTD   LAGOS
32  BIRAIDU Microfinance Bank    KOGI
33  BIRNINN KUDU Microfinance Bank   JIGAWA
34  BONNY Microfinance Bank    RIVERS
35  BRISTOL Microfinance Bank    LAGOS
36  BROADBASE Microfinance Bank Ltd   DELTA
37  BROADVIEW Microfinance Bank   LAGOS
38  CAPITAL Microfinance Bank Ltd    ADAMAWA
39  CASHJET Microfinance Bank    DELTA
40  CEDEP Microfinance Bank Ltd    BAUCHI
41  CENTURY Microfinance Bank    LAGOS
42  CHAT Microfinance Bank LTD    KADUNA
43  CHIBUEZE Microfinance Bank    ABIA
44  CIRCULAR Microfinance Bank    EDO
45  CITIGATE Microfinance Bank    LAGOS
46  CKC Microfinance Bank     RIVERS
47  CLASSIC Microfinance Bank    OGUN
48  COASTLINE Microfinance Bank    DELTA
49  COMBINED BENEFITS Microfinance Bank  OGUN
50  COMMON BENEFIT Microfinance Bank   LAGOS
51  COMMONWEALTH Microfinance Bank LTD KADUNA
52  COMPLETE TRUS
T Microfinance Bank   LAGOS
53  CONFLUENCE Microfinance Bank  KOGI
54  CREDIT EXPRESS Microfinance Bank   LAGOS
55  CROWNED EAGLE Microfinance Bank   LAGOS
56  CUBIC Microfinance Bank    EDO
57  CUTTING EDGE Microfinance Bank   EDO
58  DAILY CAPITAL Microfinance Bank   LAGOS
59  DANELS GLOBAL Microfinance Bank   ABUJA
60  DANMUSA Microfinance Bank Ltd   KATSINA
61  DIVINE Microfinance Bank    RIVERS
62  DOGON DAJI Microfinance Bank   SOKOTO
63  DUNAMIS Microfinance Bank    LAGOS
64 DYNAMIC Microfinance Bank    LAGOS
65 EAGLE FLIGHT Microfinance Bank   DELTA
66 E-BARCLAYS Microfinance Bank    ABUJA
67 EBEM-OHA Microfinance Bank    ABIA
68 EBENATOR Microfinance Bank Ltd.   IMO
69 ECB Microfinance Bank     OSUN
70  EDS Microfinance Bank     LAGOS
71  EDUEK Microfinance Bank Ltd    A. IBOM
72  EKWEMA Microfinance Bank Ltd   IMO
73  EMBRACE Microfinance Bank    BAYELSA
74  EMEVOR Microfinance Bank Ltd   DELTA
75  ENTERPRISE Microfinance Bank    LAGOS
76  EQUATOR Microfinance Bank    BAYELSA
77  ESTATE Microfinance Bank    LAGOS
78  ETITI Microfinance Bank    IMO
79  EVEREST Microfinance Bank Ltd    ANAMBRA
80  EVO Microfinance Bank     RIVERS
81  EWT Microfinance Bank    ABUJA
82  EXCELLENT Microfinance Bank    BENUE
83  EXPRESS Microfinance Bank    ABIA
84  EZIMUZO Microfinance Bank Ltd   ANAMBRA
85  FESTAC 77 Microfinance Bank    LAGOS
86  FIELDREAMS Microfinance Bank   LAGOS
87  FIRST HERITAL Microfinance Bank   LAGOS
88  FIRST OMASI Microfinance Bank   ENUGU
89  FREEDOM Microfinance Bank    LAGOS
90  FUND EXPRESS Microfinance Bank   LAGOS
91  FUT Minna Microfinance Bank Ltd   NIGER
92  FUTO Microfinance Bank    IMO
93  GALAXY Microfinance Bank Ltd    DELTA
94  GAMJI Microfinance Bank Ltd    KEBBI
95  GARDEN CITY Microfinance Bank   RIVERS
96  GBOKO Microfinance Bank    BENUE
97  GITICOM Microfinance Bank    RIVERS
98  GOLDEN CHOICE Microfinance Bank   RIVERS
99  GTI Microfinance Bank     LAGOS
100  GWOROK Microfinance Bank LTD   KADUNA
101  HARBOUR Microfinance Bank Ltd   ANAMBRA
102  HAZONWAO Microfinance Bank   LAGOS
103  HILLTOP Microfinance Bank    EKITI
104  HOMELAND Microfinance Bank    BAYELSA
105  I.C GLOBAL Microfinance Bank    DELTA
106  IC Microfinance Bank     LAGOS
107  IDAH Microfinance Bank    KOGI
108  IDEAL TRUST Microfinance Bank Ltd   ANAMBRA
109  IFONYIN Microfinance Bank    OGUN
110  IGANGAN Microfinance Bank    OYO
111  IHECHIOWA Microfinance Bank    ABIA
112  IHIMA Microfinance Bank    KOGI
113  IHITTE Microfinance Bank Ltd.    IMO
114  IJARE Microfinance Bank    ONDO
115  IKORODU DIVISION Microfinance Bank   LAGOS
116  IKWUANO Microfinance Bank    ABIA
117  IMPACT Microfinance Bank    LAGOS
118  IMPERIAL Microfinance Bank    LAGOS
119  IMSU Microfinance Bank    IMO
120  INTEGRATED Microfinance Bank   LAGOS
121  INVESTMENT Microfinance Bank   ABIA
122  IPE Microfinance Bank     ONDO
123  ISHIAGU Microfinance Bank Ltd    ANAMBRA
124  ISUOFIA Microfinance Bank Ltd    ANAMBRA
125  ITELE Microfinance Bank    OGUN
126  IVIE Microfinance Bank     EDO
127  IYEDE Microfinance Bank Ltd    DELTA
128  JEGA Microfinance Bank Ltd    KEBBI
129  JHN Microfinance Bank     ABUJA
130  KARIS Microfinance Bank    OGUN
131  KBS Microfinance Bank     LAGOS
132  KERANA Microfinance Bank    PLATEAU
133  KFC Microfinance Bank     LAGOS
134  KOGI Microfinance Bank    KOGI
135  KOREDE Microfinance Bank    ONDO
136  KSF Microfinance Bank     LAGOS
137  LALUPON Microfinance Bank    OYO
138  LANDGOLD Microfinance Bank    OGUN
139  LEGEND Microfinance Bank    OSUN
140  LEKKI Microfinance Bank    LAGOS
141  LIFT Microfinance Bank     EDO
142  LOFTY HEIGHTS Microfinance Bank   EDO
143  MARMARA Microfinance Bank    TARABA
144  MAXITRUST Microfinance Bank    RIVERS
145  MAYFIELD Microfinance Bank    LAGOS
146  MCB Microfinance Bank    LAGOS
147  MIC Microfinance Bank     LAGOS
148  MILESTONE Microfinance Bank    LAGOS
149  MOORGATE Microfinance Bank    LAGOS
150  MULTIVEST Microfinance Bank    OYO
151  MUNICIPAL Microfinance Bank    ABUJA
152  MUSTASONS Microfinance Bank   LAGOS
153  NAKOWA Microfinance Bank    KADUNA
154 NATEX Microfinance Bank Ltd    ANAMBRA
155 NDIOLU Microfinance Bank Ltd    ANAMBRA
156 NEIGHBOURHOOD Microfinance Bank   RIVERS
157  NEW GATE Microfinance Bank    LAGOS
158  NEW IMAGE Microfinance Bank   OGUN
159  NEWAGE Microfinance Bank    ONDO
160  NEW-LIFE Microfinance Bank    LAGOS
161  NEXUS Microfinance Bank Ltd    NIGER
162  NGAS Microfinance Bank    PLATEAU
163  NKPA Microfinance Bank    ABIA
164  NKPOLU-UST Microfinance Bank   RIVERS
165  NKPOR Microfinance Bank    ANAMBRA
166  NSU Microfinance Bank Ltd.    IMO
167  NSUKKA Microfinance Bank    ENUGU
168  OBIOMA Microfinance Bank    ABIA
169  OBOKUN Microfinance Bank    OSUN
170  OBOSI Microfinance Bank Ltd    ANAMBRA
171  OCON SUCCESS Microfinance Bank   OGUN
172  ODU Microfinance Bank    KOGI
173  ODUDUWA Microfinance Bank    OSUN
174  OLIVE Microfinance Bank    LAGOS
175  OLOMI Microfinance Bank    OYO
176  OLOMOYOYO Microfinance Bank   OYO
177  OMNI Microfinance Bank    LAGOS
178  OMUMA Microfinance Bank    IMO
179  OPENGATE Microfinance Bank    AB
UJA
180  ORAEZUE Microfinance Bank Ltd   ANAMBRA
181  ORIE-ORBA Microfinance Bank    ENUGU
182  OSINA Microfinance Bank    IMO
183  OSOMHE Microfinance Bank    EDO
184  OTUN EKITI Microfinance Bank Ltd   EKITI
185  OWENA Microfinance Bank    OSUN
186  OWHOWHA Microfinance Bank Ltd   DELTA
187  OYAN Microfinance Bank    OSUN
188  PARALLEX Microfinance Bank    LAGOS
189  PET Microfinance Bank     RIVERS
190  PLANNET Microfinance Bank    LAGOS
191  PRIMATE Microfinance Bank    LAGOS
192  PRIME Microfinance Bank Ltd    A. IBOM
193  PROLIFIC Microfinance Bank    LAGOS
194  PROSPERITY Microfinance Bank    EDO
195  REALITY Microfinance Bank    OYO
196  RIGGS Microfinance Bank    LAGOS
197  ROYAL Microfinance Bank    RIVERS
198  SAMINAKA Microfinance Bank LTD   KADUNA
199  SHIMAZ Microfinance Bank    OSUN
200  SOLACE Microfinance Bank    DELTA
201  SOUTH WEST IKOYI Microfinance Bank   LAGOS
202  SOVEREIGN Microfinance Bank    LAGOS
203  STANDEX Microfinance Bank    ANAMBRA
204  TOKI RAINBOW Microfinance Bank   RIVERS
205  TOUCHSTONE Microfinance Bank   LAGOS
206  TRADERS Microfinance Bank    LAGOS
207  TREASURES Microfinance Bank    LAGOS
208  TRINITY Microfinance Bank Ltd    A. IBOM
209  TRI-STAR Microfinance Bank    ENUGU
210  UDEZUKA Microfinance Bank Ltd   ANAMBRA
211  UFUMA Microfinance Bank Ltd    ANAMBRA
212  UGHIEVWEN Microfinance Bank   DELTA
213  UJOELEN Microfinance Bank    EDO
214  ULI Microfinance Bank Ltd    ANAMBRA
215  ULTIMATE Microfinance Bank    LAGOS
216  UMUHU OKABIA Microfinance Bank   IMO
217  UMUNZE Microfinance Bank Ltd   ANAMBRA
218  UNIQUE Microfinance Bank    LAGOS
219  UNIQUE TRUST Microfinance Bank Ltd.   DELTA
220  URUALLA Microfinance Bank Ltd   IMO
221  UTUGWANG Microfinance Bank   CR. RIVER
222  UVWIE Microfinance Bank Ltd    DELTA
223  VENTURE SUPPORT Microfinance Bank   LAGOS
224  WIZETRADE Microfinance Bank    LAGOS

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