How much money you need to set up microfinance banks in Nigeria
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How much money you need to set up microfinance banks in Nigeria

- The CBN has said all Tier 1 microfinance banks must have a capital requirement of N200 million while the Tier 2 bank must maintain N50 million capital base

- Tier 1 comprises of banks in the urban and high populated areas, while Tier 2 will mainly focus on the rural or unbanked areas

- National micro finance banks must also have N3.5 billion by April 2020 and N5 billion capital base by April 2021

The Central Bank of Nigeria (CBN) has released a new circular on the capital requirement for the operation of microfinance banks in Nigeria.

This new circular follows an earlier one given by the bank on Monday, October 22, 2018 with a new strategy of strengthening the recapitilisation base of micro finance banks and helping those without bank access in the country.

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In the latest memo, the CBN divided microfinance banks into two categories of Tier 1 and Tier 2, where the former comprises of banks in the urban and high populated areas, while the latter will mainly focus on the rural or unbanked areas.

The Tier 1 micro finance banks, according to CBN, will now have a capital requirement of N200 million while the Tier 2 category must have a capital base of N50 million

The central bank has also mandated that the Tier 1 banks must have a N100 million base and the Tier 2 unit must have N35 million by April 2021 to ease the process of recapitalisation.

The apex bank also said a state microfinance bank must have the capital of N500 million by April 2020 and N1 billion by April 2021.

The national micro finance banks are not left out as they too must have N3.5 billion by April 2020 and N5 billion capital base by April 2021.

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Meanwhile, Legit.ng earlier reported that according to CBN, another $55 million was allocated to customers requiring foreign exchange for business and personal travels, tuition or medical fees

The central financial institution also injected $210 million into the various segments of the market to sustain its intervention in the Inter-Bank Foreign Exchange Market.

Isaac Okorafor, the CBN director of Corporate Communications, made this known in a statement in Abuja on Tuesday, February 19.

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Source: Legit

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