The Central Bank of Nigeria, and the International Finance Corporation have charged Microfinance Banks, to embrace self-regulation and consolidation in order to enhance performance and sustainability of the sector.
A statement said the National Association of Microfinance Banks had also called for standardised performance measures and requirements for operators in the sub-sector.
Representatives from the institutions spoke during the 5th annual symposium of the Nigerian Microfinance Platform in Ibadan, Oyo State, with the theme: ‘Self-regulation for sustainability and development of the microfinance sector.’
In her keynote address, the Deputy Governor, Financial Sector Surveillance, CBN, Mrs Aisha Ahmad, stressed the need for self-regulation in the MFB sub-sector.
She said, “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 organisation comes into play.”
Ahmad, who was represented by the Director, Other Financial Institutions Supervision Department, Mrs Tokunbo Martins, spoke about the expectation of the CBN from MfBs operators in terms of self-regulation.
She 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, standardised performance measures driven by the best performing operators in the microfinance sector.
Also speaking, the Country Director of IFC, Mr Eme Essien, noted while self-regulation was important, it would not happen immediately but gradually as operators and regulators worked together.
She, however, stressed that in addition to self-regulation, there was need for consolidation in the MfBs sector, noting that most of the MFBs in the country were small and their viability was fragile.
The President, NAMB, Mr Rogers Nwoke, said self-regulation had been one of the cardinal objectives of the association since inception.
He noted that self-regulation among other things would eliminate the regulator-anxiety of the operator and enhance compliance.