The House of Representatives have asked the Central Bank of Nigeria (CBN) to immediately suspend the recapitalisation of Microfinance Banks (MFBs).
This followed the adoption of a motion by Rep. Saidu Abdullahi ( APC-Niger) on the floor of the House on Wednesday in Abuja.
Moving the motion, Abdullahi said that out of 874 licensed MFBs, about 612 may be negatively affected by the recapitalisation policy.
According to him, from findings, only 30 per cent of MFBs will be able to meet the April 2021 timeline while 70 per cent are likely to be out of business with severe consequences for the financial services industry.
He expressed concerned that the MFBs may not be able to meet up with the recapitalisation requirement of the CBN within the proposed time.
This according to him is due to the adverse effect of COVID–19 and other economic realities.
He added that in addition to the negative economic impact of the COVID–19 pandemic, Nigeria’s economy recently exited recession, the implication of which will be a significant slowdown in economic activities.
He added that the liquidity position of the government and businesses have been impacted negatively.
The lawmaker said if the 612 MFBs, which is equivalent to 70 per cent of the entire Nigerian MFBs, with the workforce of about 44,800 staff, were shut down, it would aggravate unemployment.
He said it would also compound the challenges of insecurity, youth restiveness, poverty, apathy and hopelessness across the country.
The House, however, urged the CBN to suspend the planned recapitalisation programme, until the economy is stabilised and considered safe for a new deadline to be fixed.
The House mandated the Committee on Banking and Currency to interface with the CBN to find a workable solution to the challenges associated with recapitalisation of the MFBs in Nigeria.
It asked the committees to report back within four weeks for further legislative action.