- Reps posits that the closure of microfinance banks has caused undue hardship
- Reps objects to the revocation of some microfinance banks licenses
House of Representatives, Wednesday, urged the Central Bank of Nigeria (CBN) to restore the operational licenses of 47 microfinance banks across the country.
The call came on the heels of a motion titled “Call to Investigate the Closure of some Microfinance Banks across the nation”, moved by Hon. James Shuaibu Barka at the plenary.
Presenting the motion, Barka noted that on May 22, 2023, the Governor of the Central Bank of Nigeria (CBN) revoked the operational license of forty-seven (47) Microfinance Banks across the country, including Biyama
Microfinance Bank Ltd, Hong Local Government Area in Adamawa State.
He said: “The reasons cited in the communication include that the banks were either inactive, insolvent, failed to render returns, closed shop, or ceased to carry on the type of banking business for which they were licensed for more than six (6) months in contravention of the Banks & Other Financial Institution Act (BOFIA) 2020.
“The closure of Biyama Microfinance Bank, which is the only community bank in the Hong Local Government Area, has caused undue hardship to the people who depend on the banking and financial services offered by the bank for their small and medium enterprises.
“Closing down the only financial institution in a place where the people go through so much hardship to earn stipends to deposit, or to get small loans to run small businesses for survival would only frustrate them further and may push them into crime in order to survive.
“Hong is one of the Local Government Areas that was ravaged by Boko haram insurgents, which left thousands of people without any means of livelihood, thus a deliberate bias of economic stimulating activities in favour of such communities would go a long way in helping to resuscitate their local economy”.
Barka further said that after the recapitalization of the Bank to the required 50 million naira share capital, the Bank never ceased operating in line with BOFlA and has been making all required reports and returns.
“The Board of the Bank and other stakeholders have reviewed the incident and written formal complaint to the CBN, objecting to the revocation of their license as, since regular visits from the CBN, the Bank has never been accused of defaulting, neither has any examiner’s report been issued to show that the Bank has offended any law, rules or regulations of any of the regulatory authorities.
“If the situation is not urgently resolved, the people will resort to keeping their money at home, which makes them easy prey for armed robbery and burglary.
“The people of Hong Local Government Area are predominantly farmers, and the rainy season is their most active season, thus the matter requires urgent attention”, he said.
Adopting the motion, the House mandated its committee on Banking and Currency (when constituted) to investigate the recent revocation of the operational licenses of microfinance banks across the country and report back within 4 weeks for further legislative action.
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