What is required to establish a MICROFINANCE bank

We will like to let you know the basic things you need if you want to establish a micro finance bank in Nigeria.

Before we start let us know what a micro finance bank is all about.
A micro finance bank is a bank in Nigeria that is basically licensed by the Central bank of Nigeria to offer financial and non financial services. Most Micro finance bank mostly deals with domestic money transfer and deposits while others deal with giving out loans to encourage small scale businesses.

The people who are being offered the loans are people with low income,salary earners,farmers and artisans. The loan is given out based on the cash flow of your business and at times on the character of the applicants.

The loans most times are given in less than half a year, in terms of Agriculture it can be extended to one year and when it comes to property development  it can take up to 2 years and the average loans to be given out is from #500 or a little above that for a beginner.

Getting Micro finance license what you need to know.

There are three types of micro finance bank in Nigeria which are as follows:

• The Unit micro finance bank: This bank has only one office which means there are no branch and the start up capital is 20,000,000
• The state micro finance bank: These can open new branches within the state with the approval of the CBN and their start up is up to 100,000,000
• National micro finance bank: With the approval of the CBN they can have branches scattered all across the country and the start up capital is 2,000,000,000.