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BANKING & FINANCE

Last Updated Monday, April 14, 2008

NDIC tasks financial homes on investing in community projects
 

   

  The Nigeria Deposit Insurance Corporation (NDIC) says it will closely monitor Micro Finance Banks (MFBs) and Primary Mortgage Institutions (PMIs) to ensure proper investment of depositors funds.
Mr. Ganiyu Ogunleye, the Managing Director of NDIC said this in Benin on Monday at the opening of a sensitisation seminar on the extension of deposit insurance to licensed MFBs and PMIs.
He challenged the financial institutions to, as a matter of policy, identify and finance viable micro projects in their immediate banking environment.
He said the tendency of some operators to mobilize resources in the rural or suburban areas mainly for investment in money market products did not impact positively on the rural economy.
According to Ogunleye, such disposition do not support wealth creation, being one of the components of the Seven Point Agenda of the present administration.
He reminded the operators that they had vital role to play in facilitating economic inclusion of the unbanked segment of the population.
He also urged them to ensure accessibility of banking services to financially unsophisticated populace.
The NDIC boss however observe that the rate of rendition of statutory returns of MFBs and PMIs had been unsatisfactory.
Ogunleye noted that hardly did up to 50 per cent of the operators render returns as at when due even though such information was required to monitor the health of the institutions on a constant basis.
"Also our examination report reveals weak corporate governance as well as inadequate awareness or total lack of risk management processes in the MFBs and PMIs.
"I urge you to know that sound governance and effective risk management are critical to the viability of financial institutions and to take urgent steps to address these inadequacies," he added.
Ogunleye was represented by the Director (Special Insured Institution Department) Ms Eunice Mgbojikwe.

   

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