In a bid to strengthen the microfinance banking sub-sector, the Central Bank of Nigeria (“CBN”) has increased the minimum capital requirement of microfinance banks as follows:
1. Unit Microfinance Bank N200,000 (Two Hundred Million Naira);
2. State Microfinance Bank N1,000,000,000 (One billion Naira); and
3. National Microfinance Bank N5,000,000,000 (Five billion Naira).
In order to meet these requirements, existing microfinance banks are expected to explore the possibility of mergers and acquisitions and/or direct injection of funds. The CBN has stated that the new minimum capital requirement takes immediate effect for new applications for licences while existing microfinance banks are expected to comply with the CBN’s directive with effect from 1 April 2020.
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