The House of Representatives on Wednesday urged the Central Bank of Nigeria to reinstate the functioning licenses of 47 microfinance institutions nationwide.
The call was made in response to the plenary’s acceptance of James Barka’s resolution, “Call to Investigate the Closure of Some Microfinance Banks Across the Nation.”
When introducing the motion, Barka, who represents Adamawa State’s Hong Federal Constituency, mentioned that the CBN had cancelled the operating licences of 47 microfinance institutions nationwide on May 22, 2023, including Biyama Microfinance Bank Ltd. in Adamawa State’s Hong Local Government Area.
He said: “The reasons cited in the communication include that the banks were either inactive, insolvent, failed to render returns, closed shop, or ceased to carry on the type of banking business for which they were licensed for more than six months in contravention of the Banks and Other Financial Institutions Act 2020.
“The closure of Biyama Microfinance Bank, which is the only community bank in the Hong Local Government Area, has caused undue hardship to the people who depended on the banking and financial services offered by the bank for their small and medium enterprises.
“Closing down the only financial institution in a place where the people go through so much hardship to earn stipends to deposit, or to get small loans to run small businesses for survival would only frustrate them further and may push them into crime in order to survive.
“Hong is one of the Local Government Areas that was ravaged by Boko Haram insurgents, which left thousands of people without any means of livelihood, thus a deliberate bias of economic stimulating activities in favour of such communities would go a long way in helping to resuscitate their local economy”.
Barka said after the recapitalisation of the Biyama Microfinance Bank to the required N50 million share capital, the bank had been in operation, making all required reports and returns.
“The board of the bank and other stakeholders have reviewed the incident and written a formal complaint to the CBN, objecting to the revocation of their licence as, since regular visits from the CBN, the bank has never been accused of defaulting, neither has any examiner’s report been issued to show that the bank has offended any law, rules or regulations of any of the regulatory authorities.
“If the situation is not urgently resolved, the people will resort to keeping their money at home, which makes them easy prey for armed robbery and burglary.
“The people of Hong Local Government Area are predominantly farmers, and the rainy season is their most active season, thus the matter requires urgent attention”, he said.
Adopting the motion, the House mandated its Committee on Banking and Currency (when constituted) to investigate the recent revocation of the operational licences of microfinance banks across the country and report back within four weeks for further legislative action.
