The Nigeria Deposit Insurance Corporation (NDIC) revoked the licenses of 153 Micro-Finance Banks (MFBs) in 2018.
The NDIC disclosed this in its annual report covering 2018 financial year.
According to the report, 294 MFBs were examined, focusing on their operations, board and management oversight, risk management practices, internal control systems and the level of compliance with applicable laws, rules and regulations.
Further Details: During the year, the NDIC said it effectively closed 138 MFBs and five Primary Mortgage Banks (PMBs) whose licenses were revoked by the CBN between 8th October and 3rd December 2018.
In the discharge of its obligation as liquidator, the NDIC further stated it made cumulative
payments totaling ₦116.258 billion to depositors, creditors and shareholders. The breakdown includes payments of insured and uninsured deposits of ₦108.641 billion.
Financial Conditions of MFBs: In 2018, the CBN revoked the licenses of 153 MFBs while a few new ones were licensed. As a result of these developments, there was a decrease in the number of MFBs in operation from 1,008 as at 31st December 2017 to 888 as at 31st December 2018.
Similarly, NDIC said the number of MFBs rendering statutory returns
dropped from 651 in 2017 to 595 in 2018.
- The MFBs’ shareholders’ funds stood at ₦89.15 billion as at 31st December 2018
which was a significant improvement when compared with ₦85.77 billion as at 31st
- The total assets of MFBs stood at ₦384.50 billion
- Also, total loans and advances stood at ₦221.51 billion in December 2018.
- Meanwhile, Non-performing loans decreased by 5.27% from ₦26.18 billion in December 2017 to ₦24.80 billion in December 2018.
Earning and Profitability: According to the report, MFBs’ sub-sector reported a gross income of ₦105.00 billion in 2018 from ₦89.63 billion posted in 2017.
- Interest income also recorded an increase of 3.06% from ₦78.98 billion in 2017 to ₦81.40 billion in 2018. While Non-interest income slightly improved by 2.25% of ₦23.60 billion.
- Profit before tax recorded a marginal increase of 0.06% from ₦16.21 billion in
2017 to ₦16.22 billion in 2018.
- However, there was a decline in Return on Asset (ROA) and Return on Equity (ROE) from 4.50% and 18.90% recorded in 2017 to 4.22% and 18.19% in 2018.
- On the other hand, the micro-finance banks total deposits increased by 14.7% from ₦166.88 billion in 2017 to ₦191.41 billion in 2018.
- Meanwhile, it was revealed that micro-finance banks loan to deposits ratio stood at 115.73% in 2018 against 120.66% recorded in 2017.