The Nigeria Deposit Insurance Corporation (NDIC) has till date collected barely N1.6 billion by way of premium since it started in 2005, it’s managing director, Umaru Ibrahim, said on Monday.
Umaru said the corporation ought to have recorded more than this sum but for the low premium collection from various micro-finance banks which he noted remained a major challenge to the protection of depositors’ funds.
He noted that due to this challenge, NDIC has, as at today, set aside some large chunk of money, to the tune of N16 billion in a special fund to augment its collections in case some of the institutions fail.
He spoke at the workshop for operators in the microfinance sub-sector in Abuja which was organised by the corporation to sensitise stakeholders on understanding the need to pay premium and timely too.
His words, “One of the issues that we have been grappling with in NDIC is the level of premium collection; to date, we have collected barely N1.6 billion by way of premium since we started in 2005.
“This is a very paltry sum, if one considers the total insured and even the uninsured deposits that exist in the banks and we know that there are some major players in microfinance industry.
“And should one or two of them fail, this N1.6 billion is certainly a far cry, there is no way that we can use it to pay even the insured depositors. Because of the paltry N1.6 billion we have collected, we have set aside some large chunk of money, today, I think we have set aside almost N16 billion in a special fund to augment what we have collected in case some of your institutions go under.
“And this is the kind of money we are now using to pay depositors of more than 103 microfinance banks whose licences were revoked sometimes in September 2010 by the Central Bank of Nigeria (CBN).
“And in that regard, about N4.5 billion insured deposit liabilities of these 103 microfinance banks was involved; and as we speak, we have paid close to N 2.5 billion of this insured deposits”.
Ibrahim said that if the corporation had relied on the N1.6 billion, it would not have been able to meet its obligations.
He said that the essence of good insurance was to meet needs as at when necessary and urged participants to ensure that they supported the corporation to play its role effectively.
He assured that the corporation had devised means to help any bank with serious liquidity challenges through its policy of extending financial assistance.