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What are the specific objectives of the new microfinance policy?
  The specific objectives of the microfinance policy are to: (a) Make financial services accessible to a large segment of the potentially productive Nigerian population which would otherwise have little or no access to financial services. (b) Provide synergy and mainstreaming of the informal sub-sector into the national financial system. (c) Enhance service delivery by microfinance institutions to micro, small and medium entrepreneurs (MSMEs). (d) Contribute to rural transformation by mobilizing savings. (e) Promote linkage programme between microfinance institutions (MFIs), Deposit Money Banks (DMBs), Development Finance Institutions (DFIs), specialized Funding institutions. (f) Create employment opportunities and increase the productivity and household income of the economically active poor in the country, thus enhancing their standard of living. (g) Promote a platform for microfinance service providers to network, exchange view and share experience.
 

Who are the target clients of Microfinance Banks?
  Microfinance Banks target client includes the following group of persons: (a) The economically active poor. (b) Low-income households (c) The un-banked and underserved people, particularly vulnerable groups such as women, youths and the physically challenged. (d) Informal sector operators, micro-entrepreneurs and subsistence farmers.
 

Who can establish a Microfinance Bank?
  Microfinance bank can be established by individuals, groups of individuals, community development associations, private corporate entities or foreign investors
 

How many categories of MFB licences are available?
  Based on the recent reform, there are three (3) categories available to promoters based on geographical spread: (a) A Unit MFB licensed to operate in one location. It shall be required to have a minimum paid-up capital of N20 million; (b) A State MFB licensed to operate within a specific state or F.C.T. and can open branches or cash centers within the same state or the F.C.T. subject to a prior written approval of the Central Bank of Nigeria. It shall be required to have a minimum paid-up capital of N100 million; (c) A National MFB licensed to operate in more than one state including the Federal Capital Territory and can open branches in all states of the Federation and the F.C.T. subject to a prior written approval of the Central Bank of Nigeria. It shall be required to have a minimum paid-up capital of N2 billion.
 

I already provide microfinance service through a NGO, must I transform to MFB?
  Any NGO-MFIs providing Microfinance with an asset base of N20 million or above and/or a membership of 2,000 and above which intends to accept deposit from the public, shall be required to transform. An existing NGO-MFI which intends to operate a MFB can either incorporate a subsidiary MFB while still carrying out its NGO operations or fully convert into a MFB. Where however the existing NGO-MFI intends to engage only in the provision of micro-credit to their targeted population without mobilizing deposits from the general public, it shall not be required to transform. It would however be required to forward periodic returns on their activities to the CBN for statistical purposes.
 

What are microfinance loans?
  Microfinance loans are small loans granted to micro enterprises by financial intermediaries on the basis of the borrower’s cash flow.
 

What are the unique features that distinguish microfinance from other formal financial products?
  (1)The smallness of loans advanced and/or savings collected. (2)The absence of asset-based collateral. (3)Simplicity of operations.
 

What is a Microfinance Bank (MFB)?
  Microfinance Bank (MFB) is any company licensed by the Central Bank of Nigeria CBN to carry on the business of providing financial services such as savings and deposits, loans, domestic funds transfer and non-financial services to microfinance clients.
 

Where should the application for licence be directed?
  Application for a licence to operate a MFB should be sent to The Governor, Central Bank of Nigeria or The Director, Financial Policy & Regulation Department.
 



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Facts : 1/1/1900
London Club of Creditors:These are mainly uninsured and unguaranteed debts extended by commercial banks to nationals of debtor nations. Members of the club are commercial banks mainly in industrialized countries. The first London club meeting was held in 1976 to discuss re-payment and conclude re-structuring agreements.
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