OFFICIALS of the Nigerian Deposit Insurance Corporation (NDIC) have said that only 180 Micro Finance Banks (MFBs) in the country, representing 20 percent have implemented the Enterprise Risk Management framework meant to boost the operation of the financial institutions.

The corporation also said Wednesday that it has instituted mechanisms to improve the performance of MFBs in Nigeria, and also ensure that the funds and liquidity of depositors and such banks were adequately protected.

The Managing Director of NDIC, Alhaji Umaru Ibrahim, said at a one day securitisation workshop for operators of Micro Finance Banks, that the banks were established in the country “as a response to the inability or apathy of Deposit Money Banks (DMBs) to serve the low-income segment, Micro, Small and Medium Enterprises (MSMEs), pointing out that “sadly, deposits mobilized by 936 MFBs) as at June, 30th 2015 was meager N173.3 billion.”

While he said the NDIC would continue to ensure that MFBs in the country operate under the purview of the guidelines, Ibrahim explained that, “NDIC as an insurer, reimburses depositors of MFBs up to a maximum limit of N200,000 per depositor per MFB in the event of failure of such MFB.”

He added: “The new coverage level represents an increase of 100 percent over the earlier coverage level of N100,000. The NDIC has developed and deployed a framework for financial assistance for MFBs so as to promptly intervene and assist the MFBs to overcome temporary liquidity challenges. Surprisingly, MFBs with liquidity challenges do not request for funding assistance.”

However, Ibrahim argued that, “to underscore the critical role of risk management, the corporation in the shortest possible time will deploy Differential Premium Assessment System (DPAS) in determining Deposit Insurance Premium for MFBs.”

The NDIC boss who stressed that, “the DPAS is weighted in favour of strong risk management culture”, however pointed out that, “for MFBs to access the funding platform available, such institutions are expected to demonstrate strong Enterprise Risk Management capable of enhancing the eligibility criteria.”

He said: “As you will recall that in August 2014, the Federal Government launched the first N220 billion Medium, Small and Micro Enterprises (MSMEs) Fund with initial disbursement to Niger, Delta and Akwa Ibom states.