NDIC begins auction of failed 46 MFBs’ assets

THE Nigeria Deposit Insurance Corporation (NDIC) may have begun the process of auction of assets belonging to the liquidated 46 Microfinance banks in country.

The MFBs, which lost their licences in a target examination carried out jointly by NDIC and the Central Bank of Nigeria (CBN), had also lost their assets.

CBN had in December 2013 approved the liquidation of 83 micro-finance banks operating in the country, as it discovered that some of them existed only on paper, while others were used to defraud Nigerians, as well as breaching rules of operations.

Consequently, the NDIC has been appointed the provisional liquidator for their wind down.

Specifically, the distressed MFBs were observed to be as a result of many factors, including high level of no-performing loans resulting in high portfolio at risk; gross under-capitalisation in relation to the level of operations; poor corporate governance and incompetent boards; high level of non-performing insider-related credits and others forms of insider abuse as well as heavy investments in the capital market.

NDIC, in exercise of its authority as liquidator of failed Microfinance banks (MFBs), in an advertorial invites interested members of the general public to buy the assets of the failed MFBs.

The assets include furniture, fixtures, fittings, equipment, generators, motor vehicles of defunct MFBs by Public Competitive Bidding/Auction and sealed bids for Motor Vehicles and Generators.

A breakdown of the list of the failed microfinance banks showed that out of the 46, 18 is from South West; 18 is from South South; 2 is from South East; 2 is from North Central; 3 is from North West; 3 is from FCT.

According to the guidelines establishing MFBs, they were primarily meant to act as a tool for propelling the economy by providing access to credit to small businesses and people at the grassroots thereby reducing poverty in the country.

Presently, the microfinance industry in Nigeria had been confronted with numerous challenges since the launch of the Microfinance Policy Framework in December 2005, with significant number of them deviating from the microfinance concept and the methodology for delivery of microfinance services to the target groups.