Microfinance bank licence: Steps to obtain CBN approval (Part 3)
ADOLPHUS ALETOR is an experienced Executive Managing Director with a demonstrated history of working in the banking industry. Skilled in Negotiation, Business Planning, Risk Management, Analytical Skills, and Banking. He is a strong business development professional.
During the week, the CBN released an exposure draft of a new guideline for the supervision of microfinance banks in Nigeria. The CBN displayed its adaptive, flexible and responsive character with the new guideline. Next week, I will be looking at the changes. But meanwhile, I am in a hurry to conclude this episode which I started three weeks ago. While eager to quickly conclude this piece, I recall that we were to discuss what the AIP specifically addresses. All the piece this month promises to be exciting and rich with new information.
Continuing from last week, below are the finishing steps for your application for license.
J) The CBN shall before the issuance of approval – in –principle [AIP] arrange an appraisal interview for the promoters of the proposed MFB. The date and time for the interview shall be communicated to the promoters in writing.
k) If satisfied, the Governor may grant a license to the MFB; where the grant of license is declined, the reason(s) for refusal shall be communicated in writing to the applicant.
l) The CBN may at any time vary or revoke any conditions of a license or impose additional conditions.
m) Where a license is granted subject to some conditions, the MFB shall comply with those conditions to the satisfaction of the CBN within such period, as the CBN may deem appropriate in the circumstances. Any MFB that fails to comply with such conditions shall be guilty of an offence under BOFIA, 1991 [as amended].
n) All licensed MFBs shall be required to add Micro Finance Bank (MFB) Ltd after their names which shall be registered with the Corporate Affairs Commission in compliance with the Companies and Allied Matters Act (CAMA)
As an investor, it is imperative for you to understand the expectations of your regulator and the standards upon which your request for license will be appraised. I have attempted to highlight here what the CBN shall be looking forward to satisfying themselves with.
(I) The promoters and the proposed Management team are ‘’fit and proper’’ persons to invest in/manage the financial services industry in Nigeria by regulatory standards; (ii) the promoters have submitted the names and curriculum vitae of the top management team of the proposed MFB; (iii) the minimum paid-up capital/shareholders’ funds of the relevant category being applied for is acceptable and the source is verifiable and satisfactory to the CBN; (iv) the quality of the management of the proposed MFB is sound; (v) the earnings prospect of the company is realisable; and (vi) the objects of the company as disclosed in its Memorandum and Articles of Association agree with the services listed in the provisions of Section 3 of these guidelines.
See you next week.
ADOLPHUS ALETOR is an experienced Executive Managing Director with a demonstrated history of working in the banking industry. Skilled in Negotiation, Business Planning, Risk Management, Analytical Skills, and Banking. He is a strong business development professional.