The Nigeria Deposit Insurance Corporation (NDIC) said arrangements have been finalised to prosecute the directors and other officials of the closed MFBs that were found to have been involved in insider-related abuses. This, it said, was to serve as a deterrent to other bank Directors and officials. NDIC has said it would pay a total sum of N9.8 billion to 731,000 depositors of 91 Microfinance Banks (MFBs) out of the 103 shut down last year by the Central Bank of Nigeria (CBN) over allegations of mismanagement.

The CBN had initially revoked the operating licenses of 224 MFBs but subsequently granted provisional approval for new licences to 121 out of the closed institutions.

A statement signed by the Head, Communications & Public Affairs, Mr. Hadi Birchi, stated that the corporation has so far paid N1.492 billion to 45,000 depositors of the 91 MFBs out of the N4.9 billion insured deposits which it is mandated by law to pay since the payment exercise commenced on December 6, 2010.

The corporation said however, that the balance of N4.9 billion uninsured deposits would be paid on realisation of physical assets of and recovery of debts owed to the failed MFBs.

Meanwhile, the second round payment of N2.177billion to the remaining 393,000 depositors of Integrated Microfinance Bank is to commence on Tuesday, May 3, 2011.

The NDIC had earlier paid the insured sum of N529 million to 21,000 depositors of the MFB from January 31 to February, 42011.
It added that depositors of the 11 remaining MFBs including Bristol MFB, Mustason MFB, Newgate MFB, Primate MFB and South West MFB in Lagos State; Embrace MFB and Homeland MFB in Yenagoa, Bayelsa State would be paid as soon as their records are made available to the corporation.

Others are, Cubic MFB in Benin City, Edo State; Galaxy MFB in Warri, Delta State; Gamji MFB in Birnin Kebbi, Kebbi State; and Standex MFB in Onitsha,
Anambra State.

According to the corporation, the resolve to punish erring directors and other officials believed to be responsible for the collapse of the MFBs followed preliminary reports of the books and affairs of the 103 MFBs, which revealed that many of them were run aground by their Directors and officials who engaged in insider-related.