Group urges FG to reverse revocation of MFBs, by CBN

Aba Landlords Protection And Development Association (ALPADA), an umbrella body of landed property owners in Aba, the commercial hub of Abia State, has appealed to President Bola Ahmed Tinubu, to revisit the issue of the revocation of the operating licenses of no fewer than 179 Micro Finance Banks(MFBs), by the Central Bank of Nigeria (CBN).

They affirmed that reversal of the revocation order on the MFBs, will go a long way in fast tracking the economic recovery efforts of the present administration in the country.

The group in a petition, signed, by Leo Ike Nnodu Okoye, Leonard Onyemesiri, Benson Imo and B.I Okoro, dated July 26, 2023 and made available to BusinessDay, stated that the revocation order, as contained in two separate federal government official gazettes, numbers 93 and 94, in May 2023, have negatively impacted both on the lives of the promoters and staff of the affected banks, as well as the economy of the country.

 ALPADA lamented that the decision of the country’s apex bank in liquidating the affected banks has led to the loss of about 4000 direct and indirect jobs.

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This according to them, is in addition to the untold hardship, which rural dwellers, who form the bulk of the primary beneficiaries and clientele of the operations of the suspended microfinance institutions have been subjected to.

” The situation has seriously affected the rural dwellers who rely on these microfinance banks for their economic activities, especially in those areas that the commercial banks can not cover.

“Most of their savings are equally trapped in these microfinance banks. Most of the microfinance banks in the country are off shoots of the community banks, which are easily accessible to the rural dwellers. It is in the light of the hardships being experienced by the poor rural dwellers and the general negative effects of the revocation order that we are appealing for its suspension”, APALDA stated.

The petition also faulted most of the reasons adduced by the CBN for the revocation order, noting that while some of the microfinance institutions may have experienced some operational difficulties, most of them nevertheless despite the prevailing challenging economic, social and political situations in the country in the last few years still strived to meet their primary responsibilities.

“About three years ago , these microfinance institutions were directed to raise their minimum share capital from ₦250,000 to ₦50million, by the CBN.

“It is also a known fact by all that in the last three years the whole world, not just Nigeria witnessed some challenges, ranging from the Covid-19 pandemic, insecurities, and global economic meltdown.

“However, despite all the challenges, the affected micro microfinance institutions still not only met the recapitalization policy, but most of their obligations.

“Most of the reasons given by the CBN for the revocation, such as insolvency, failure to render returns, inactivity and failure to render most of their mandatory services for over six months are not factual.

Even in the face of the serious challenges posed by the currency redesig , the affected microfinance banks still remained viable and responsive to their primary responsibilities”, APALDA stated

They blamed the travails of the affected financial institutions mainly on the corrupt and tainted disposition of the CBN leadership, under the now suspended Godwin Emefiele, adding that reversing the revocation order will go a long way in fast tracking the economic recovery efforts of the present regime.

APALDA noted that until the eve of gazetting the suspension order that all the affected banks were still in operation.

The Umbrella body of Aba Landlords also stated that the Nigerian Deposit Insurance Corporation (NDIC) has since blamed the suspension on some entrenched forces out to sabotage efforts at improving the lots of the poor masses.