Regulatory Alerts2022-03-28 | FPR/DIR/PUB/CIR/001/042Guidelines for the Regulation of Credit Guarantee Companies in Nigeria
The Central Bank of Nigeria (CBN) has issued guidelines for the regulation and supervision of Credit Guarantee Companies (CGCs) in the country. These guidelines outline the licensing procedure, permissible and non-permissible activities, corporate governance requirements, and financial and prudential requirements for CGCs. The CBN aims to improve access to credit for Micro, Small, and Medium Enterprises (MSMEs) and reduce credit risk for lenders by providing guarantees. The CBN will supervise CGCs and has the power to grant and revoke licenses, determine capital requirements, and approve the appointment of board members and senior management. CGCs must maintain a minimum paid-up capital of 10 billion Naira and are restricted from providing guarantees to entities outside Nigeria and within their holding company structure. The guidelines also cover the responsibilities of MSMEs, Participating Financial Institutions, and the CGC itself.