Taking stock of the Nigerian microfinance banking sector: lessons from an assessment of 25 MFBs in five states

Microfinance practices in Nigeria are unique relative to other countries. Although NGO-microfinance institutions are present, regulated, deposit-taking microfinance banks (MFBs) dominate the landscape. With roughly 870 MFBs licensed by the Central Bank of Nigeria, the microfinance banking sector is large but still quite young - established in 2005. It was within this environment that the GIZ 'Pro-poor Growth and Promotion of Employment in Nigeria (SEDIN)' programme commenced a CAMEL & Social Performance Management (SPM) rating of 25 MFBs in five states. The results of the rating provided excellent holistic insight into the current practices of Nigerian MFBs and displayed a number of curious, at times worrying, trends within the sector. Subsequently, this stock-taking paper attempts to discuss what key policy implications may resonate from these findings.