Mi­cro­fi­nance Bank Li­cence: Steps to ob­tain CBN ap­proval (2)


LAST WEEK I STARTED THE series on how to ob­tain a mi­cro­fi­nance bank li­cence from the Cen­tral Bank of Nige­ria. I at­tempted to sim­plify the steps and pro­vi­sion re­quired for such to make for easy un­der­stand­ing by any prospec­tive in­vestor. My in­ter­ac­tions dur­ing the week were fo­cused on the script­ing of my piece in orig­i­nal form. Many peo­ple wanted to know the source. The CBN guide­line is a pub­lic doc­u­ment that can be down­loaded and read by any­one with­out fear of be­ing pros­e­cuted. The only prob­lem some in­vestors have is ei­ther the time or dis­ci­pline to go through the doc­u­ment which is the only rea­son I have taken up the re­spon­si­bil­ity of para­phras­ing it for them. So by popular de­mand, I have culled out the por­tion I ex­plained last week, just the way the guide­lines pro­vided for it. Be­low are the steps and doc­u­men­ta­tion any prospec­tive in­vestor would re­quire to ob­tain a MfB li­cence from the CBN. a. Non-re­fund­able ap­pli­ca­tion fee (this changes from time to time and cat­e­gory of li­cense) in bank drafts, payable to the Cen­tral Bank of Nige­ria; b. De­posit of the min­i­mum cap­i­tal re­quire­ment for the rel­e­vant cat­e­gory of MFB, which shall be in bank draft payable to the CBN. The cap­i­tal thus de­posited to­gether with the ac­crued in­ter­est shall be re­leased to the pro­mot­ers on the grant of a li­cense; and ac­cept­able ev­i­dence of pay­ment by the pro­posed share­hold­ers of the min­i­mum cap­i­tal re­quire­ment for the cat­e­gory of li­cense be­ing ap­plied for; in­clud­ing per­sonal state­ment that cap­i­tal does not orig­i­nate from bank credit, any form of credit or ques­tion­able sources and any ac­tiv­ity that re­lates to money laun­der­ing; im­por­ta­tion is­sued by an au­tho­rized dealer [banks] in the case of for­eign cap­i­tal; e. A copy of de­tailed fea­si­bil­ity re­port dis­clos­ing rel­e­vant informatio­n that shall in­clude: (i) the ob­jec­tives and aims of the pro­posed ! for the es­tab­lish­ment of the MFB; (iii) the ser­vices that the MFB in­tends to pro­vide; (iv) the branch ex­pan­sion pro­gramme [if any] within the first five years; (v) the pro­posed train­ing pro­gramme for staff and man­age­ment suc! ! "! ! ! op­er­a­tion of the MFB, in­di­cat­ing its ex­pected growth ! tails of the as­sump­tions upon which the fi­nan­cial pro­jec­tion has been made; (viii) the or­ga­ni­za­tional struc­ture of the MFB, set­ting out in de­tail, the func­tions and re­spon­si­bil­i­ties of the top man­age­ment team; (ix) the com­po­si­tion of the Board of Di­rec­tors and the Cur­ricu­lum vi­tae (CV) of each mem­ber in­clud­ing other di­rec­tor­ships held [if any]; (x) ap­pro­pri­ate man­age­ment informatio­n sys­tems, in­ter­nal con­trols and pro­ce­dures in­clud­ing man­u­als of oper­a­tions and (xi) the con­clu­sions based on the as­sump­tions made in the fea­si­bil­ity re­port. f. A copy of the draft Mem­o­ran­dum and Ar­ti­cles of As­so­ci­a­tion; g. A let­ter of in­tent to sub­scribe to the shares of the pro­posed MFB, signed by each sub­scriber; h. A copy of the list of pro­mot­ers/pro­posed share­hold­ers in tab­u­lar form, show­ing their busi­ness and res­i­den­tial ad­dresses [not # ! the names and ad­dresses of their bankers; i. Names and CVs of the pro­posed mem­bers of the Board of Di­rec­tors. The CVs must be per­son­ally signed and dated; No pro­posed MFB un­der this pol­icy shall in­cor­po­rate/reg­is­ter its name with the Cor­po­rate Af­fairs Com­mis­sion [CAC] un­til a writ­ten ap­proval-in prin­ci­ple [AIP] has been com­mu­ni­cated to the pro­mot­ers by the CBN, a copy of which shall be pre­sented to the Cor­po­rate Af­fairs Com­mis­sion.

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