NDIC to Prosecute Failed MFB Bosses

Nigerian Deposit Insurance Corporation (NDIC) has said chieftains of failed Micro Finance Banks (MFB) whose cases had been fully investigated and those found to have violated the existing policy guidelines as they relate to security of depositors’ funds would soon be prosecuted.

Alhaji Ibrahim Umar, managing director, NDIC stated this when a delegation of the National Association of Microfinance Banks (NAMBs)  visited the Corporation’s Headquarters in Abuja adding that the the measures would ensure that all those abused the operational guidelines that led to huge losses of depositors money were brought to justice.

He said the Corporation was fully committed to the current efforts by the regulatory authorities to strengthen the micro finance banking sub-sector of the financial services industry and by implication, help in restoring depositors’ confidence in the system.

According to him, the Corporation in furtherance of its statutory roles in deposit insurance management has been doing a lot to ensure that appropriate institutional framework is put in place to support the operating micro finance banks just as more capacity building programmes will be provided for management of the MFBs to enhance their professional competences.

He explained: “There is no doubt that one cannot over-emphasise the importance of micro finance banks. The issue of prosecution of offenders of micro finance banks is very important to us. Now when the CBN revoked the license of 103 micro finance banks about two and a half years ago, we have done a making sure that we pay the depositors of these banks.

“But one thing that comes out clearly is that some people have abused the trust that was given to them to run these institutions, we have established a task force comprising the various law enforcement agencies, the police, the EFCC, the Minister of Justice that go through all these recoded cases of fraud and other offences perpetrated by these people. We have compiled a number of cases which we hope that very soon they will be prosecuted by the Attorney General or by us or by the police as the case be.

“The issue of trust cannot be over emphasised. We want to cease this opportunity to make that you sensitize your staff, and your board on this particular issue. This can be enhanced by evolving a very good framework for risk management, KYC and so on because these are issues that are of top priority for financial institutions and micro finance banks cannot be an exemption”, Umar added.

The NDIC boss said further that the efforts by the Association to ensure that members are regulated and made to observe the highest ethical standards in their positions of responsibility will go a long way in sanitising the system.

Earlier in his address, Chief Jethro Akun, national chairman of the Association, had commended the NDIC for its sundry initiatives targeted at stabilising the MFB sub-sector and re-assured the Board of the association’s readiness to partner with the Corporation in the collective efforts targeted at achieving sustainable growth of the financial services industry

While taking a cursory appraisal of the evolution of the MFB subsector and the roles the NAMB has been playing to instil discipline amongst its members over the year, Akun however canvassed the existing policy on Unit MFBs with a view to allowing them to establish cash centres in the grassroots and by so doing, help to achieve the goals of the nation’s financial inclusion strategy.

In addition, he also called for the establishment of a Private Sector Microfinance Stabilization Fund, decentralisation of capacity building programmes of MFBs, establishment of a Clearing House for MFBs and removal of NAPEP funds from the balance sheets of the Association’s members as policy imperatives that, if addressed, would help in strengthening the micro finance banks in providing financial services more efficiently at the grassroots.