CBN unveils guidelines for non-interest MFBs

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The Central Bank of Nigeria (CBN) has released a draft guidelines on the regulation and supervision of non-interest (Islamic) micro finance banks (MFBs) in the country.

A Non Interest (Islamic) Financial Institution (NIFI) means a bank under the purview of the CBN which transacts banking business, engages in trading, investment and commercial activities and also provides financial products and services in accordance with the principles of Islamic Commercial Jurisprudence.

Similarly, a Non Interest (Islamic) Microfinance Bank (NIMFB) means any MFB licenced by the CBN to carry on the business of providing financial services, engages in trading, investment and commercial activities and also provides financial products and services as specified in Section two of the guidelines.

In the document posted on its website, the banking sector regulator placed the NIMFBs into three categories namely Unit, State and National.

A Unit NIMFB is authorised to operate in one location. It shall be required to have a minimum paid-up capital of N20 million and is allowed to have only one branch outside the head office within the same Local Government Area subject to availability of free funds of at least N20 million and compliance with the prescribed minimum prudential requirements.

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