In a move to bolster financial inclusion and support the economically active poor, the Central Bank of Nigeria (CBN) has issued a circular exempting Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) from its cash withdrawal limit. The directive, outlined in a circular tagged ‘PSM/DIR/PUB/CIR/001/049,’ was released on Monday by the Director of Payment System Management Department, Musa Jimoh.
The circular titled ‘Exemption of Primary Mortgage Banks and Microfinance Banks from Cash Withdrawal Limits’ emphasizes the vital role played by MFBs and PMBs in providing specialized retail banking services to their customers and catering to the financial needs of the underserved segments of society. The exemption allows these institutions to facilitate direct cash withdrawals above the standard cash withdrawal limits without incurring processing fees.
The exemption aligns with CBN’s commitment to enhancing financial inclusivity and empowering the economically vulnerable by enabling easier access to financial services. By alleviating the burden of processing fees on MFBs and PMBs, the central bank aims to enable them to continue contributing to the growth of the economy while providing essential financial services to their clientele.
However, the circular emphasizes that while the exemption from processing fees is granted, MFBs and PMBs are still required to adhere fully to the prescribed cash withdrawal limits, as outlined in a previous circular with reference number ‘BSD/DIR/PUB/LAB/015/073,’ issued on December 21, 2022.
Financial analysts and industry experts have welcomed the CBN’s decision, seeing it as a positive step towards expanding financial inclusion and fostering economic growth in Nigeria. The exemption is expected to enhance the operations of MFBs and PMBs, enabling them to better cater to the financial needs of their customers, especially those belonging to the economically active poor.
The circular marks another strategic move by the CBN to strengthen the nation’s financial system and drive economic development. By supporting institutions that serve the unbanked and underbanked population, the central bank is poised to create a more inclusive and resilient financial landscape in Nigeria.
The exemption comes into effect immediately, signaling the beginning of a new phase in financial services for the economically active poor, who can now expect more accessible banking options and increased financial flexibility from MFBs and PMBs. As the nation’s economy continues to evolve, this regulatory measure is expected to foster sustainable growth and prosperity for all Nigerians.
