CBN To Quiz Microfinance Banks

NEWS EXTRA

The Central Bank of Nigeria, CBN, is expected to intensify its probe on the activities of Microfinance banks in the country soon.

Sources said the CBN has listed the microfinance banks among the outfits that will be thoroughly investigated and penalised if found guilty of fraudulent activities this year.

The move, our source further said, is coming on the heels of an appeal made by Mr. Olatunde Oladokun, the Executive Director, Self-Reliance Economic Advancement Programme, that the apex bank needs to, as a matter of urgency, arrest the high level of fraud in micro-finance institutions across the country.

Oladokun explained that “The CBN should come up with a policy that will ensure the recordkeeping of all the clients and staff in microfinance banks so that if they go to another MFB, they will be detected.

“CBN should also maintain a data where names of fraudsters will be kept and used for future reference and tracking. This will reduce the rate of fraud in the MFBs. There could be a data base of all the clients to find out fraudulent clients. There should be something that will create fear in the minds of fraudsters so that they will not just come to destroy the sector.

“The sector is like a third-party relationship and the future of this country is uncertain if we do not control fraud in the MFBs. Today, microfinance institutions are facing a lot of challenges. A good example is the dual or multiple memberships maintained by clients, thereby making it difficult for microfinance institutions to know their actual membership.

“It has been observed that some members of staff that have in a way or the other defrauded an organisation are being employed by other non-bank organisations, where they will still defraud such an organisation.

“I am imploring the association of non-banks to come up with strategic measures, such as keeping of records of each staff member of all microfinance institutions within their jurisdiction so as to verify and give a standing order that before any organisation recruits, the association should be copied for reference purposes.”