The Nigeria Deposit Insurance Corporation is overwhelmed by the number of microfinance banks in the country; a situation which has made the supervision of the subsector difficult, Jacob Afolabi, a deputy director, at the corporation has said.

Mr. Afolabi, who made the disclosure on Thursday in Kaduna, said unlike the regular deposit money banks, the NDIC does not know the location of all the existing microfinance banks, a situation that has made monitoring and supervision difficult.

“Even when we write them letters, some of the mails are returned undelivered. We cannot locate some of these microfinance banks because of their wide spread across the country.”

The officialalso decried the low compliance with regulations by operators in the sector.

According to him, the corporation is supposed to conduct off-sight monitoring on a monthly basis to regulate developments in the sector, but that only 50 per cent of operators comply with regulations that make that possible.

In order to safeguard the interest of depositors, Mr. Afolabi said the corporation is working on a method of identifying functional and non-functional microfinance banks.

The Central Bank of Nigeria, in 2005, released a revised guideline for the operation of microfinance banks in the country. This resulted in the conversion of community banks into micro finance institutions in other for them to play a pivotal role in the poverty alleviation effort of the government.

Since then, close to 800 institutions were registered as microfinance banks across the country.

The current turmoil in the banking industry has taken a toll on the microfinance banks with many of them closing shop and unable to meet their obligations to depositors.