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The need for self-regulation in Microfinance Banks (MFBs) cannot be overemphasised as it enhances performance and sustainability of the sub-sector.
The 2011 revised microfinance policy framework prescribes self-regulation by apex associations of Microfinance Banks and Institution.
In view of this, the Central Bank of Nigeria, (CBN), and the International Finance Corporation, IFC, have charged Microfinance Banks, (MFBs) to embrace self-regulation and consolidation in order to enhance transparency and good corporate governance practices among their members.
Meanwhile, the National Association of Microfinance Banks, NAMB, has called for standardized performance measures and requirements for operators in subsector.
These were highlights of the 5th annual symposium of the Nigeria Microfinance Platform held in Ibadan, Oyo State, with the theme, “Self-Regulation for Sustainability and Development of the Microfinance sector”.
In her Keynote address, deputy governor, Financial Sector Surveillance, Central Bank of Nigeria, CBN, Aisha Ahmad stressed the need for self-regulation in the MFB subsector, saying: “A comprehensive oversight mechanism is required for effective supervision of microfinance activities of over 900 licensed MFBs; this is where the relevance of a self-regulatory organization comes into play.”
Stressing the expectation of the CBN from MfBs operators in terms of self-regulation, Ahmad, who was represented by Tokunbo Martins, director, Other Financial Institutions Supervision Department (OFISDs) said: “We believe that the effectiveness of self-regulation in driving performance of the microfinance sector depends on an effective and efficient mechanism for addressing non-compliance, standardized performance measures driven by the best performing operators in the microfinance sector. It is therefore important that the umbrella associations set the tone right from the onset and clearly communicate their expectations which should be congruent with the regulators’ expectations for the microfinance industry.”
Also speaking, Eme Essien, country director of IFC, noted while selfregulation is important it will not happen … Read More...