Nigeria's Microfinance Bank Sector : Review and Recommendations
The report analyzes the status of the Nigerian Microfinance Banks (MFBs) sector and aims to identify and address the challenges of its effective regulation and supervision. Ensuring the financial soundness of the MFB sector is regarded as a prerequ...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/502471550250186711/Nigerias-Microfinance-Bank-Sector-Review-and-Recommendations http://hdl.handle.net/10986/31320 |
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okr-10986-313202021-05-25T09:21:49Z Nigeria's Microfinance Bank Sector : Review and Recommendations World Bank Group MICROFINANCE BANKING REGULATION FINANCIAL INTERMEDIATION FINANCIAL REGULATION FINANCIAL SERVICES RISKS The report analyzes the status of the Nigerian Microfinance Banks (MFBs) sector and aims to identify and address the challenges of its effective regulation and supervision. Ensuring the financial soundness of the MFB sector is regarded as a prerequisite for its further development. This report was prepared at the request of Other Financial Institutions Supervision Department (OFISD) of the Central Bank of Nigeria (CBN) to inform OFISD's efforts to develop a strategy for regulation of the MFB sector with emphasis on its consolidation. The report does not attempt to address in depth other systemic issues related to microfinance market development, such as funding constraints or gaps in financial infrastructure. While important these factors are secondary to the report’s central focus on reforming and recalibrating the regulatory framework and ensuring effective supervision, which is regarded as necessary precursors to the growth of the sector. Only once these regulatory and supervisory reforms are implemented will the MFB sector be better positioned to start to make a more significant and sustainable contribution to financial inclusion. The findings of the report are complemented with fifteen case-studies based on a representative sample of different MFB business models and origins, drawing lessons regarding the challenges faced by the sector about factors such as their business model, governance, funding, and client base. The Microfinance Policy, Regulatory and Supervisory Framework for Nigeria of 2005 established MFBs as a means of formalizing microfinance institutions (MFIs) in order to promote financial discipline and sustainability, while also providing access to financial services to the unbanked population. The framework was designed to attract new capital as well as to regularize Community Banks (CBs), which had been established since the early 1990s, mainly as conduits for directed lending. Licensed by the CBN, MFBs are allowed to solicit deposits, which are guaranteed by the Nigeria Deposit Insurance Corporation (NDIC). 2019-02-25T17:12:34Z 2019-02-25T17:12:34Z 2017-12 Report http://documents.worldbank.org/curated/en/502471550250186711/Nigerias-Microfinance-Bank-Sector-Review-and-Recommendations http://hdl.handle.net/10986/31320 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Other Financial Sector Study Economic & Sector Work Africa Nigeria |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
MICROFINANCE BANKING REGULATION FINANCIAL INTERMEDIATION FINANCIAL REGULATION FINANCIAL SERVICES RISKS |
| spellingShingle |
MICROFINANCE BANKING REGULATION FINANCIAL INTERMEDIATION FINANCIAL REGULATION FINANCIAL SERVICES RISKS World Bank Group Nigeria's Microfinance Bank Sector : Review and Recommendations |
| geographic_facet |
Africa Nigeria |
| description |
The report analyzes the status of the
Nigerian Microfinance Banks (MFBs) sector and aims to
identify and address the challenges of its effective
regulation and supervision. Ensuring the financial soundness
of the MFB sector is regarded as a prerequisite for its
further development. This report was prepared at the request
of Other Financial Institutions Supervision Department
(OFISD) of the Central Bank of Nigeria (CBN) to inform
OFISD's efforts to develop a strategy for regulation of
the MFB sector with emphasis on its consolidation. The
report does not attempt to address in depth other systemic
issues related to microfinance market development, such as
funding constraints or gaps in financial infrastructure.
While important these factors are secondary to the report’s
central focus on reforming and recalibrating the regulatory
framework and ensuring effective supervision, which is
regarded as necessary precursors to the growth of the
sector. Only once these regulatory and supervisory reforms
are implemented will the MFB sector be better positioned to
start to make a more significant and sustainable
contribution to financial inclusion. The findings of the
report are complemented with fifteen case-studies based on a
representative sample of different MFB business models and
origins, drawing lessons regarding the challenges faced by
the sector about factors such as their business model,
governance, funding, and client base. The Microfinance
Policy, Regulatory and Supervisory Framework for Nigeria of
2005 established MFBs as a means of formalizing microfinance
institutions (MFIs) in order to promote financial discipline
and sustainability, while also providing access to financial
services to the unbanked population. The framework was
designed to attract new capital as well as to regularize
Community Banks (CBs), which had been established since the
early 1990s, mainly as conduits for directed lending.
Licensed by the CBN, MFBs are allowed to solicit deposits,
which are guaranteed by the Nigeria Deposit Insurance
Corporation (NDIC). |
| format |
Report |
| author |
World Bank Group |
| author_facet |
World Bank Group |
| author_sort |
World Bank Group |
| title |
Nigeria's Microfinance Bank Sector : Review and Recommendations |
| title_short |
Nigeria's Microfinance Bank Sector : Review and Recommendations |
| title_full |
Nigeria's Microfinance Bank Sector : Review and Recommendations |
| title_fullStr |
Nigeria's Microfinance Bank Sector : Review and Recommendations |
| title_full_unstemmed |
Nigeria's Microfinance Bank Sector : Review and Recommendations |
| title_sort |
nigeria's microfinance bank sector : review and recommendations |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/502471550250186711/Nigerias-Microfinance-Bank-Sector-Review-and-Recommendations http://hdl.handle.net/10986/31320 |
| _version_ |
1764474056360329216 |