Business
Microfinance Operators Seek Bankruptcy Laws
Operators of microfinance banks have advised the Central Bank of Nigeria (CBN) to facilitate the enactment of bankruptcy and business rescue laws for the individuals.
The appeal was contained in a communiqué issued by the operators in Lagos at the end of a certification training programme for non-executive directors of microfinance banks.
The communiqué said that the appeal was necessary because most of the customers of microfinance banks were individuals and not companies.
It said that the laws would encourage individual debtors of microfinance banks to come forward with what he had, rather than absconding with the total loans.
The Communiqué, signed by the head of training center, Chief Badejo Adeboye, and the Secretary, Mr Tope Oloniniyi, said that since such a law existed for corporate organisations, it should be enacted for the individuals.
The operators said that a situation where debtors were absconding with loans without repaying part of the them was not helping the operators.
“Currently, the CBN attached more significance to debtor companies than individual debtors.
“We want effective personal bankruptcy and business rescue laws that will push these individuals.
“Some of these individuals owe more than one microfinance banks.
“So, once he is able to declare all he has in cash and kind, it will be easier to share what he has in a proportional manner by liquidators,” it stated.
The Communiqué said that the delay in the adjudication of cases on fraud and loan defaults was not good for the sub-sector.
“The fact that the EFCC considers most of the fraud cases affecting microfinance banks to be below its threshold have emboldened perpetuators of fraud against the sub-sector
“The individuals have continued to exploit the endless adjournment in conventional courts in perpetuating their acts.
“The government should set up a workable judicial framework that is time sensitive for the sub-sector,” the communiqué said.
The training programme was organised by the CBN, the Nigeria Deposit Insurance Corporation and the Financial Institution Training Centre.