Nigeria: MFBs to adjust to International Financial Reporting Standard

From Business Day Online

Operators in the Micro-Finance Banking-subsector have indicated their readiness to adjust their financial statements to International Financial Reporting Standard (IFRS) as directed by Central Bank of Nigeria (CBN).

The operators made this known in separate interviews with News Agency of Nigeria (NAN) on the sideline of a workshop organised by the National Association of Micro-Finance Banks (NAMB), Lagos chapter, on Friday in Lagos.

The CBN Governor, Malam Sanusi Lamido Sanusi, had directed banks and all formal corporate organisations to work toward adopting full IFRS by the end of 2012.

The CBN also directed the full adoption of IFRS by micro finance banks by the same date 2012.

Mr James Akpaiso, the Managing Partner of James Okpudo Akpaiso Chartered Accountants and Company, who was a facilitator at the training, urged the operators fast track the process of conversion.

He said that the essence of the training was to enlighten the operators on what IFRS was all about.

“According to CBN guidelines for Micro-Finance Banks on IFRS, the banks are expected to comply by 2014,” he said.

He said operators should discard the rumour that IFRS would not be necessary for Micro-Finance Banks (MFBs).

“MFBs need it also because they are operating within the shores of Nigeria.”

Also commenting, Mr Dotun Adewumi, the Head of Financial Control and Administration, Infinity Microfinance Bank, Lagos, said the preparation of financial statements in line with IFRS, would reduce financial malpractice.

“IFRS will expose financial malpractices because it will guide against the repetition of fictitious assets.
“IFRS will expose any expenses incurred during the financial year and this must be written off; it can never be carried to next financial year.”

Mr Bright Ididia, the Executive Secretary of NAMB, Lagos Chapter, said that as part of the willingness by the operators to adopt IFRS, banks had started training some of their customers to do same.

“To our utmost surprise, the banks have also established training departments for entrepreneurs, knowing fully well that a true financial position of their business is needed before loans could be given out,” Ididia said.

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