The House of Representatives has directed the Central Bank of Nigeria (CBN) to suspend the recapitalisation of Microfinance Banks (MFBs) with immediate effect.
This followed the adoption of a motion by Rep. Saidu Abdullahi ( APC-Niger) on the floor of the House on Wednesday in Abuja.
Moving the motion, Abdullahi said that out of 874 licensed MFBs, about 612 may be negatively affected by the recapitalisation policy.
“From findings, only 30 per cent of MFBs will be able to meet the April 2021 timeline while 70 per cent are likely to be out of business with severe consequences for the financial services industry,” the lawmaker noted.
He also expressed concern that the MFBs may not be able to meet up the recapitalisation requirement of the CBN within the proposed time.
He added that in addition to the negative economic impact of the COVID–19 pandemic, Nigeria’s economy recently exited recession, which affected the economy.
In its decision, the House urged the CBN to suspend the planned recapitalisation program, until the economy is stabilised and considered safe for a new deadline to be fixed.
The House mandated the Committee on Banking and Currency to interface with the CBN to find a workable solution to the challenges associated with recapitalisation of the MFBs in Nigeria.
It asked the committees to report back within four weeks for further legislative action.