Currently micro finance bank are of two forms all licensed community banks in Nigeria that m et EBN guidelines have been transformed to micro finance bank. The two forms are (1)micro finance banks (MFBS) licensed to operate as a unit. These are lither to community banks licensed to operate branches and /or cash centers subjects to meeting the prescribed prudential requirements and availability of free funds to opening branches cash centers the minimum paid-up
capital for this category of banks is N20 million for each branch. The branching should be gradual within a local council before it spreads to other local councils and state
ii. microfinance banks licensed to operate in a state . these are MFBS licensed to operate in all parts of the state at once without recour be to gradual coverage (spead ) as in unit mMFBS branches are opended subject to meeting the prescribed prudential requirements and availability of free funds the minimum paid up capital for this category of banks is N1 billion . about 6000 community banks have migrated to micro finance banks by January 1st 2008 and there are several others that have been licensed to operate (CBN 2008)
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