CBN, NDIC may sanction microfinance banks - Over non-rendering of account

Gbola Subair, Abuja
Tunde Lemo,
Deputy Governor, CBN

The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) may sanction the micro finance banks (MFBs) and primary mortgage institutions (PMIs) over non-rendition of statement of accounts.

At present, the NDIC disclosed that only half of the 716 registered mircofinance banks are rendering returns to the regulatory authorities.

The managing director of NDIC, Mr. Ganiyu Ogunleye, leveled the non-rendition of account allegation on microfinance banks and the primary mortgage institutions.

Speaking at a seminar organised for the MFBs and the PMIs in Abuja, he warned the operators against non rendition of statements of accounts as he disclosed that only half of them considered it necessary to render accounts as at when due.

The NDIC boss, disclosing that the corporations examination report revealed weak corporate governance and inadequate awareness or lack of risk management processes in the MFBs and urged the operators to comply with sound governance principles and effective risk management.

Noting that these are critical to the viability of a financial institution , Mr. Ogunleye said the regulatory authorities are ready to see that these principles of sound corporate governance are not compromised.

Mr. Ogunleye also disclosed that the extension of deposit Insurance Scheme to MFBs and the PMIs would ensure financial safety net in the sector.

Roles of SON in industrialisation

By Femi Ibirogba

John Akanya, DG, SONTHE act that established the Standards Organisation of Nigeria has made the agency an instrument of realising the vision 2020 long before the vision became articulate. However, the agency (SON) appears too ill-equipped for the herculean task of facilitating industrial revolution in a country craving for one.

Nigerians actually want to see local industries grow qualitatively and quantitatively, and the Standards Organisation of Nigeria, just like NAFDAC, has a role to play by controlling the influx of cheap but substandard products which strangulate the local industries.

Substandard products, ranging from domestic to industrial items, either being manufactured locally or imported by countries that have seen Nigeria as a dumping ground of such products, abound everywhere in Nigeria. It all appears there is no agency or organisation saddled with the control of standards.

Substandard generators, motorcycles, household utensils, office equipment, industrial materials, among others, appears cheaper but they kill the local manufacturing sector and industrialisation process.

Therefore, it is high time the organisation (SON) as well as the Customs was restructured, repositioned and reengineered, just like NAFDAC, to champion the course of industrial products standardisation as a cardinal instrument to vision 2020 actualisation.

It is also clear that the leadership of NAFDAC has made the agency a force to be reckoned with because the impacts are felt not only on the health of Nigerians but also on the economy and industrial steady growth as well. However, Standards Organisation of Nigeria appears to be emersed in a deep slumber that makes it passive and reactive rather than pro-active.

The Standards Organisation of Nigeria Act states the following functions to be performed by the organisation:

(a) To organise tests and do everything necessary to ensure compliance with standards designated and approved by the council.

(b) To undertake investigations as necessary into the quality of facilities, materials and products in Nigeria, and establish a quality assurance system, including certification of factories, products and laboratories.

(c) To ensure reference standards for calibration and verification of measures and measuring instruments.

(d) To compile an inventory products requiring standardisation.

(e) To compile Nigerian Standards specifications.

(f) To foster interest in the recommendation and maintenance of acceptable standards by industry and the general public.

(g) To develop methods for testing of materials, supplies and equipment, including items purchased for use of departments of the government of the federation or a state and private establishments.

(h) To register and regulate standards marks and specifications.

(i) To undertake preparation and distribution of standards samples ... and

(n) To co-ordinate all activities relative to its functions throughout Nigeria and to co-operate with corresponding national or international oganisations in such fields of activity as it considers necessary with a view to securing uniformity in standards specifications.

These, among others, are the functions assigned to the standard organisation of Nigeria by the act.

However, a detailed study of items (a) and (n) makes it clear that everything necessary to ensure compliance with set standards, if any, is not in place, and co-ordination of national and international organisations in such fields of activity is too deficient.

The questions begging for answers are: Is SON coordinating activities of importers from countries with which Nigeria has bilateral or multilateral economic ties? Are specifications of goods imported from these countries compatible with the standard expected in Nigeria? Are there even detailed specification standards on the imported goods?Considering the standards of power generating sets, household utensils and electronic appliances imported or manufactured in Aba, the Standard Organisation of Nigeria has to go back to the drawing board, and it has to wake up from its slumber. If placed against the background of NAFDAC, SON is doing nothing!

Some analysts say corruption and incompetence are likely to be the limiting factors for the SON. If that is the case, they opined, the organisation should be investigated and the leadership changed so that pro-active and reputable individuals could be brought in to make SON what it should be to Nigeria.

The chairperson of the Association of Small and Medium Scale Entreprises, Oyo State branch, Mrs. W. Adejumo, said the SON and the Customs are not doing their work well and she wants the government to beam its searchlight on the activities of the two agencies to unravel whatever the problem is.

“If the Standards Organisatioin of Nigeria and the Customs are really at work, we should not have been having this problem.

“So, the government should look inward into these agencies to make work like NAFDAC. The SON is not doing its work well, unlike NAFDAC. Until the SON and the Customs do their work effectively, micro, small and medium scale entreprises will continue to be jeopardised,” Chief (Mrs.) Adejumo said.