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Featured Essay: Nigeria
Stephanie Charitonenko provides an insider’s look at recent discussions about improving the regulatory environment in Nigeria for its fledgling microfinance industry. In this featured essay, Charitonenko, who supports USAID’s Promoting Improved Sustainable MSME Services (PRISMS) Program, analyzes the proposed national microfinance policy and other developments to enhance access to financial services in Nigeria. Be sure to check out other articles in our Essays on Regulation and Supervision series in our Reference Library.
The fledgling microfinance industry in Nigeria has recently garnered the attention of policymakers and the donor community. Recent efforts have been devoted to improving the policy, legal and regulatory framework for microfinance in Nigeria. The objective of this note is to highlight the strengths and weaknesses of the current system, as well as discuss the implications of recent and ongoing changes in the legal and regulatory framework for microfinance, namely:
- The latest draft of the national microfinance policy (that has been under development for the last three years) includes the basic legal underpinnings for regulation and supervision of microfinance providers. It is now under review by the Governor and Directors of the Central Bank of Nigeria (CBN);
- Proposed changes to the Small and Medium Industries Equity Investment Scheme (SMIEIS) Program in order to increase access to lending by farm and non-farm micro, small and medium-scale microenterprises; and
- The introduction of measures to promote consolidation within the banking industry, including new capitalization requirements for commercial banks.
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