The Central Bank of Nigeria has increased the capital requirements for microfinance banks in the country in a bid to tackle the challenge of inadequate capital base in the sub-sector. The CBN announced the upward review of the minimum capital requirement in a circular to all microfinance banks in the country.
The minimum capital requirement for unit and state microfinance banks was raised by nine hundred per cent each to two hundred million naira and one billion naira, respectively from twenty million naira and one hundred million naira, while that of national microfinance banks increased by one hundred and fifty per cent to five billion naira from two billion naira.
According to the circular, the new minimum capital requirement takes immediate effect for new applications, while existing microfinance banks shall be required to fully comply with effect from the first of April, 2020.
The Director, Financial Policy and Regulation Department, CBN, Mr Kevin Amugo, said the apex bank reviewed the minimum capital requirement in consideration of the role of microfinance banks in economic growth and development.