The National Association of Microfinance Banks (NAMBs) has said that the Central Bank of Nigeria, CBN’s directive to its members to adopt the International Financial Reporting Standards (IFRS) was impracticable for now.
The association’s President, Jethro Akun, in an interview with journalists in Lagos therefore appealed to the CBN to defer the implementation till 2016, stressing that many of its members were in a fix because they were ignorant of the process.
Akun said that majority of microfinance bank operators needed time, money and training to transit from the old ways to the internationally accepted standards.
Only 10 out of the 900 microfinance bank operators have so far complied with the directive which expired on Dec. 31, 2013.
IFRS allows the investing public and other stakeholders access to the record of operations of a firm. The aim is to sanitise and stabilise the sector to repose the confidence of the investing public in it.
Akun appealed to CBN not to apply the sledge hammer on the microfinance operators yet to comply with the standards.
He said that applying a stringent measure on the sector could hinder the growth and survival of microfinance banks in Nigeria.
According to him, many members of the operators are yet to fully comprehend the processes involved in it. “We are not opposed to this policy and we are ready to comply with the standards.
“We are only appealing for an extension of deadline for its compliance in order to become familiar with the processes involved.
“We have written to the IFRC in Lagos for a meeting to discuss the need for better enlightenment on the pains and gains of the standards.
“We need to have an opportunity of interacting with them (IFRC) in terms of trainings, workshops and seminars to understand the benefits of IFRS,’’ he said.
He said that only 10 out of about 900 microfinance banks had complied, adding that such banks had to spend huge sums of money on training and the actual conversion itself.
He urged CBN to give the operators an additional two years for the remaining 890 members to comply and appealed to the regulatory authorities not to treat the issue of IFRS compliance as a punitive measure on microfinance banks, stressing that the sector is a fragile one struggling to develop.