Department of Accounting

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Browsing Department of Accounting by Author "Abuh, Adah"

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    ASSESSING THE NIGERIAN MICROFINANCE BANKS’ COMPLIANCE WITH PRUDENTIAL REQUIREMENTS
    (Department of Accounting Nasarawa State University Keffi., 2011-12-02) Abuh, Adah
    Microfinance Banks (MFBs) operate like deposit money banks except that they are restricted from carrying out general banking activities in order to focus on micro finance transactions. The activities of MFBs are spelt out in the prudential guidelines developed by CBN. One of the major activities is granting of micro loan to those customers, but with attention on the poor that cannot easily have access to the conventional banks. However, the peculiarity of the micro loan becomes difficult both for MFBs and the customers to operate because of the contents of the prudential guidelines that must be adhered to. The problem area is default often referred to as non-performing classification that may be due to the inadequate loan period and day(s) period involved in the default recognition and classification. The study therefore focuses on the problem of non-performing loan with the objective to find out whether it is possible for the MFBs to strictly comply with the guidelines on them. To achieve this objective, relevant questions were formulated and used for oral interview with the management staff of 15 MFBs from three states selected at random. The responses with the literature reviewed were analyzed and the summary of findings revealed that the prudential guidelines were forced on these banks and the expected results could not be achieved. The study recommends that the existing prudential guidelines should be studied with a view to discovering the weaknesses for solution by the CBN and MFBs.