MICROCAPITAL BRIEF: National Association of Microfinance Banks (NAMB), Central Bank of Nigeria (CBN) Propose Unified Software System for Microfinance Banks (MFB) in Nigeria

history of microfinance bank in nigeria

The National Association of Microfinance Banks (NAMB), a trade group of 820 microfinance banks (MFBs) in Nigeria, recently partnered with the Central Bank of Nigeria (CBN), the country’s main financial regulator, to propose a unified software system for all of NAMB’s member institutions. According to Olufemi Babajide, chairman of the southwest region of NAMB, the unified software will not only create “economies of scale” by standardizing the online systems and reducing costs for MFBs and providers, but also facilitate regulatory auditing of the operators’ statement of accounts. He also claims that the current system, which contains approximately 500 different software programs, forces some MFBs to spend as high as NRN 500,000 (USD 3,100) and NRN 1 million (USD 6,2000) on annual maintenance charges. Mr Babajide suggests that the new unified software system will reduce those maintenance charges to only NRN 50,000 (USD 310) by eliminating “hassle” and complexity. The new system reportedly will be able to sign in approximately 1,000 MFBs into one software program. CBN currently is working with various MFBs on the modality and technical feasibility of the software system [1].

As of April 2011, NAMB has 820 member MFBs. Financial information for NAMB is unavailable. In the year 2012, CBN reported total assets of NGN 13.3 trillion (USD 82.4 billion).

By Michael Averell, Research Associate

About the National Association of Microfinance Banks (NAMB)

The National Association of Microfinance Banks (NAMB) is a trade group of Nigerian microfinance banks (MFBs) that merged with the

Association of Microfinance Banks in Nigeria (AMBN) in 2009. As of April 2011, NAMB has 820 member MFBs. Its Lagos State Chapter has 180 members as of December 2011.

About the Central Bank of Nigeria (CBN)

The Central Bank of Nigeria (CBN) was established in 1958 as Nigeria’s central banking authority. As defined by the act of parliament that created CBN, its statutory mandates are as follows: “to issue legal tender currency; to maintain external reserves; to safeguard the international value of the legal tender currency; to promote monetary stability and a sound financial system in Nigeria; and to act as banker and financial adviser to the Federal Government.” As of November 2012, CBN reports total assets of NGN 13.3 trillion (USD 82.4 billion).

Sources and Additional Resources

[1] All Africa News: “Nigeria: Association Prepares Micro-Finance Banks for Uniform Software,” http://allafrica.com/stories/201305210543.html

MicroCapital story, July 25, 2013, “MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN), Bill and Melinda Gates Foundation Create “Geospatial Mapping of Financial Institutions” Program to Reach Unbanked Nigerians,” http://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-bill-and-melinda-gates-foundation-create-geospatial-mapping-of-financial-institutions-program-to-reach-unbanked-nigerians/

MicroCapital story, February 19, 2013, “MICROCAPITAL BRIEF: Central Bank of Nigeria (CBN), National Association of Microfinance Banks to Establish Technical Committee to Adress Implication of Microfinance Policy, Including Recapitalization of MFBs,” http://www.microcapital.org/microcapital-brief-central-bank-of-nigeria-cbn-national-association-of-microfinance-banks-to-establish-technical-committee-to-address-implication-of-microfinance-policy-including-recapitalization/

MicroCapital story, February 5, 2013, “MICROCAPITAL BRIEF: Smaller Microfinance Banks in Nigeria Want 2 More Years to Raise Capital or Close Branches,” http://www.microcapital.org/microcapital-brief-smaller-microfinance-banks-in-nigeria-want-2-more-years-to-raise-capital-or-close-branches/

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Source: www.microcapital.org

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