Central Bank issues operational guidelines for development finance institutions

The Central Bank of Nigeria, CBN, on Tuesday issued regulatory and supervisory framework for the operations of the country’s Development Finance Institutions, DFIs.

The framework designed to guide the activities of the DFIs includes the dos and the don’ts for the operators as well as the sanctions against erring institutions.

The DFIs are specialised financial institutions established with specific mandate to develop and promote key sectors of the economy considered to be of strategic importance to the overall socio-economic development of the country.

Under the guidelines, the DFIs are permitted to engage in activities which would provide finance and credit facilities to eligible borrowers either by way of refinancing of loans to medium and small-scale enterprises, MSMEs, issuance of guarantees for loans and issuance of bonds and notes to fund their operations.

The DFIs would also be expected to invest in government and any other securities approved by the CBN as well as offer technical assistance to borrowers on credit and business development related activities.

However, the wholesale DFIs are barred from granting retail loans or getting involved in direct lending activities; management of pension funds/schemes or involved in project management. They are also not to accept on demand any type of deposits, including savings and time deposits, or taking proprietary positions in real estate construction other than for its own business.

Specifically, the guidelines, which stated that DFIs would only engage in the extension of credit to borrowers, also spelt out the procedures, organisational structure, and the criteria to be applied in evaluating applications for loans, credit lines and guarantees.

It also specified the standards and criteria for, and timing of, periodic assessments of the creditworthiness of primary finance institutions, PFIs, obligors, or other counterparties, and for the establishment of credit limits.

The Asset/Liability Management Policy, ALM policy, that highlights the DFI’s permissible asset and liabilities, sets the standards for managing its interest rate risk and liquidity risk, and delineates the composition, duties, and operational procedures for the DFI’s Asset/Liability Management Committee.

The two categories of the DFIs (wholesale and retail) require a minimum capital of N10 billion and N5 billion respectively to become operational.

On corporate governance requirements, the guidelines vest the ultimate responsibility for the management of the DFIs on their Board of Directors, which is expected to have a minimum of seven and a maximum of 15 members.

The number of the non-executive directors, according to the guidelines, should be at least twice the number of the executive directors, with the appointment of both subject to the approval of the CBN.
The tenure of the executive directors of the DFIs should be a fixed term of not more than 5 years, subject to a renewal only once, while non-executive directors should serve for a fixed term of not more than 4 years, renewable only twice.

“For the avoidance of doubt, the maximum tenure of an executive director shall not exceed a total of 10 years, while a non-executive director shall not serve for periods exceeding 12 years in total,” the guidelines stated.

Any executive director who has served two 5-year terms may equally serve as Managing Director, if so appointed, for the maximum of two 5-year terms, with a combined maximum tenure of 20years, the guidelines said.

On collateral credit policies, DFI’s credit extensions, guarantees or other products must be secured by PFI collateral, while PFI-originated eligible loans are to be collateralized to be eligible for DFI financing or refinancing.

Any DFI found to be operating without a valid license risk outright closure and prosecution of its promoters, while those engaging in activities outside the approved business would be liable to a fine of N100,000 for each day of the default, subject to a maximum of N2,000,000. In addition, the institution would forfeit the estimated profit.

DFIs have always been there to provide financial interventions in the identified sectors, targeting micro-, small- and medium-size enterprises (MSMEs), to complement the efforts of banks and other financial institutions, OFIs.

However, limited access to long-term and low-interest funds resulted in DFIs recording limited successes.

The establishment of wholesale and retail DFIs was aimed at bridging the gap and increasing access to finance, particularly for MSMEs.


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  • obindros

    I de laugh. Good analysis. APC oF back stabers and over ambitious corrupt liers. The best for Buhari is to raise the hand of Tambuwal now. And at least give him six million oF his “mythical” 12 million votes to make a better showing than Ribadu. But off course it will still not be good enuf to match GEJ.

  • Funso Ogunsanya

    Fake pastor that sees just 1 direction in a Country. Prophet of doom Femi Aribisala or is it Aribabasala.

  • Hah!

    …Despite all your condemnation of Buhari over the years you can NEVER pin point a Corrupt Tonga on him. A real Man of God MUST be so in all ramifications. The Nigerian masses being Christians or Moslims need somebody like the Buhari you so hate. May the Good Lord touch the heart of Mr. Aribisala, Fani Kayode, Mani-Kay etc. so that they can feel the pains of bad governance we all suffer today.

    • Joshua C. King

      Hah…Buhari is as corrupt as corruption in itself. The reports of his mismanagement of PTF were elaborately hidden yet it manifests. Even if those are not enough for you. The un-electable general said at an Abacha memorial that his compatriot at loot did not steal. Please, let us move Nigeria forward instead of a return to 1983-1984 period.

      • Hah!

        ..Still you did not prove anything other than mere speculation. Mention One PTF contract that Buhari Mismanaged. All we know is that Enugu – Port-Harcourt road was un motorable until the gentle man (Buhari) come to our rescue. Since then Udi hill is no longer……?

      • Ogom

        You are “manifesting”

      • Otile

        God bless you

  • Omo Oodua

    No better analysis of APC. Good one Pastor Femi!

    • Otile

      Gbam

  • Iroro

    God help us. We are indeed helpless – really helpless.

  • Joshua C. King

    For the first time, I agree 95% with Femi. I think he should stick to politics or societal analysis. A better platform to inform, educate and entertain compared to the infamous articles of faith. Buhari’s bad baggage are such a terrible millstone that drowns him time without number. Yet he seems oblivious to it. His supporters believe this baggage is political persecution and possible fiction against their evil general.

    But then again Femi, Tambuwal has a lot of right attributes about him. He is better educated compared to Buhari and more articulate. He is much younger, energetic and has proven over the last four years that he is a nationalist and a patriotic Nigerian. His candidature will be opposed solely by the un-electable Buhari. Tambuwal will immediately get northern votes especially if Atiku is wise enough to retire. If Tambuwal can make decent presentations on Channels/AIT, he will win in the south-west and some north central states. In my analysis, Tambuwal the dark horse is the finest candidate in the APC today. Kwakwanso looks like another figure that adds to the number but won’t manage it. Tambuwal with Amaechi will do GEJ a serious challenge.

    Buhari is not a smart guy. I wish I had the time to explain that a 72 year old who suffers from severe delusions of adequacy cannot possibly be our leader going into another 4 years.

    • Hah!

      I don’t agree. You People wanted a candidate to be crushed easily. Sorry this time around we need an experienced personality. Buhari will have my vote. Sentiments of ethnicity and religion will not work. Simple.

    • Xman

      You just like Femi, he said this, u like it, and if he talks about ur religion, he is not right. Lol. If he is intelligent to talk this right, then he is also intelligent to talk right ur religion or vice versa.
      Wake up, Aribisala is yearning opata, that is simple fact. Or we put it like this, opposite ur view, on religion, he is yearning sence, on political front, he is yearning opata, do u like that? Lol, I am sure u want it the opposite, lol, u be pure MUMU simple……

    • Otile

      God bless you and give you long life to continue His good work.

  • kobomoje

    Baba femi, we have heard enough of ur analysis of Buhari and his failings, when are u goin to start ” polishing” ur fake product GEJ?

  • Dr. Kay

    This old fart again with his prophesy of doom that always hit a wobble . In a democratic system nothing stop anyone from aspiring to be the número uno and in this case Tambuwal is within his rights to aspire for the nation’s presidency. Where I think your prophesy of doom hit a snag is in the assertion that APC is bent on throwing GMB under the bus ,cause of all the thumbsucked allegations and tales of no substance you spewed out above. I will give you credit for reading the mood of the times ,but I will shoot down your emphatic postulations that it is a fait accompli. Nothing is farther from the truth, you and your PDP moneybags are scared stiff of the man Buhari , your fear is so intense that you have to resort to hallucinatory postings , thereby trying to sway people’s mind from the real fact that I will tell you here , Buhari is a runway train with no breaks, an unstoppable tsunami making its way to the shoreline . No amount of blackmail or inducement ,even pocket infrastrure as you put it will stop the momentum. Be prepared for the fourth installation of GMB fight for the presidency, this time with over 50million teeming Nigerians urging him on . Like you rightly said 12million voters that backed him are mystical ,they have ballooned to the figure I’ve highlighted above , so keep on dreaming Mr. Agbaya ma danu , your prophesy is I’m afraid looking at the wrong party , when you dreamt up this fallacy , you conveniently changed the actors and the whole script with that of the opposition to suit your clearly depraved mind and please your paymasters . Sorry oh , the horse has already bolted GMB for president, anyone that is not comfortable with that , well there are many transformers around your locale waiting to be hugged ,that is if they have any electricity in them , courtesy of Dumbo of course.

  • ABIODUN

    Bleached & shallow analysis by a pseudo-Man Of God – Fake as can be. Femi Aribisala, your ignoble place is guaranteed in the Dustbin Of History. So GEJ & PDP are your role-models, while APC & BUHARI are the evils disturbing & making Nigeria retrogress? Una just begin. Come 2015, the PDP mess will be swept, packed & disposed of duly, to be replaced by APC & BUHARI… Eat your heart out, PDP apologists, faithfuls, sycophants, bigots, sympathizers & hangers-on !

  • Mr. Abdin

    Femi is here again working for his paymaster GEJ, he has to note that PDP is beyond redemption sometimes it is unfortunate if educated femi will talking like this. I think Awo’s policy has been messed up here. and for Buhari and Atiku, they are far better than his clueless employer.

  • Nothern Sellout Adviser

    A simple political Arithmetic for APC presidential bigwig nomination, chances to win or loss the election and dilemma of Tinubu and other cabals:

    Option 1. Go on primaries, Atiku wins, APC stands high risk of losing 50% votes and eventual presidential election.

    Option 2. Go on consensus, Buhari wins, detestable to cabals, APC stands high chance of winning the presidential election.

    Option 3. Go on manipulations (“magu-magu”), Tambuwal wins, satisfying selfish interest of cabals, APC stands high risk of losing 40% votes and eventual presidential election.

    Then, a puzzling equation emerged:

    If corrupt self-centered candidate vs people choice candidate vs cables sponsored candidate stand for win and loss, then APC’s option is = ????

    Now, neither Tinubu nor the cabals can balance the equation.

    Any political mathematician to help them out??!!

    • Otile

      Ask them bro.

  • M.A

    Femi Aribisala has spoken once again and only those who are objective in analysing the present political situation within the APC will attest to the fact that everything he has said is true. Like I always say, the nemesis that awaits Buhari is right there within the APC.

    • Otile

      God bless you.

  • Oluwadaramalalawan

    Shameless pastor, so, now you are advising Buhari. I heard you saying his anti corruption campaign will not settle well with corrupt tinubu. Shamaless pastor. Now that you know buhari is anti corruption and your pay master GEJ is a corruption personified, and Nigerians major problem is corruption, then if you are a good pastor your spritua
    move is easily predictable. Shameless old cargo that never wishes anything good for the common man.

    • Otile

      Ogbeni, accept the truth and stop bitterness.

  • Ogom

    It all seems reasonable, for once.. except for Buhari being “unelectable”. There’s no basis for this, except the writer’s own biases.

  • SP

    Mr Femi Aribisala try to know one thing, the day will stop ethinicity, religion, etc is the day Nigeria will move forward. Pls let us be thinking before we put anything down or publish any article online. U didn’t show youself as a good leader for your church member.

  • True Nigerian

    Oga Aribisala, unfortunately for you and your analysis, Tambuwal has just stepped down for Buhari. Hahahahaha! Whilst you were penning this poor and utterly biased analysis, you didn’t know that Tambuwal was already preparing his withdrawal statement. Hahahahaha!!! How does that make you look now? How does that make your hasty and poorly calculated suggestions to look? If you ask me, I’d say it makes you look out of your depths, if not worse than that.

    I mean, how can you say that a candidate that consistently garners more than 12 million votes in elections that are often horrendously rigged and raped to pieces is unelectable? What does unelectability mean to your thinking faculties? The current objectionable state of the country, the sad mood of the masses, the gross disillusion of the voters due to the horrendous performance of your beloved but offensively incompetent incumbent, Buhari’s charisma, character and track record on probity, and the impatience of most Nigerians for change, are factors that should quite easily add another 10-20million more votes to the 12million votes that Buhari has been getting over the last 3 elections.

    But then, anyone as utterly biased as you patently are is unlikely to see any reality that exists outside the cocoon of his bias. On the positive side, the only thing you got absolutely right – perhaps because it fitted into your incurable hatred for Tinubu, Buhari and the APC – is your prediction that if APC schemes Buhari out of the ticket, they will lose the election woefully and the betrayal of Buhari will bring an end to APC, even in Lagos State; and that is because if Buhari is schemed out, most supporters of the APC today will regard Tinubu as a betrayer of the masses and a cancerous drawback against the hope for change in this country. But then, I don’t think Tinubu is stoopid and selfish enough not see the consequences of such gross miscalculation.

  • Otile

    Hon Femi Aribisala is my kind of writer. He has laid the facts out without mincing words. Those who have ears let them hear.

  • wode

    And now… your fake conspiracy theory has failed. Tanbuwal is no more in the race. Here is another gaffe in your analytical capability. Pastor Femi, unhealthy and uncouth sentiment is a serious disease that quickly kills the respect and intellectual growth of its subjects. You need to re-appraise and reevaluate yourself. One of the most difficult tasks is in trying to market a very bad product. There is no doubt, the marketer himself would fall into the side of the product in terms of his image and value.

  • Akindiose ,Santos Olubunmi

    These are empty conjectures. They will not stand the test of time. Man ‘s perception changes. Moreover, there is no art to show mind construction on the face. Your permutation about Tinubu is the figment of your own imagination. It is too early to predict the direction of general elections scheduled for next year. Who knows some of the candidates may not live up to the day of the elections. Certain development will come before the eve of the elections that will ultimately help people to take a decision.