NOUN MFB Engulf by Poor Governance Allegations, Shareholders Bicker

By Calista Oyeoba / Posted February 10, 2025

The National Open University of Nigeria (NOUN) management, cooperative and stakeholders are allegedly at loggerhead over who controls the operations of the institution’s Microfinance Bank (NOUN MFB).

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NOUN is reputed to have a population of over 200,000 students, making it the largest university in Nigeria by student enrollment.

The institution together with a group of stakeholders partnered to establish a microfinance Bank to serve members of staff and the student population for their micro financial transactions. With the reputed students’ population, the bank unarguably has a concurrent patronage base for nominal transactions.

Importantly, establishing the microfinance bank was aimed at diversifying the revenue base like other universities with similar micro businesses that they have hugely benefited from such.

The current ownership of NOUN MFB is shared among the school, cooperative society, the owner of Spectrum Engineering, Isa Abubakar, the Owner of Tanadi Investment Ltd and former Vice-chancellor of the school, Samaila Ado Tenebe, and Integrated Facility Management Services Ltd. There are also a few other subscribing fringes in a loose shareholding arrangement.

However, sources within the school disclosed that the bank has not enjoyed professional management, resulting in a fierce ownership fight among the shareholders who wants to control the bank’s operations, thereof.

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Observers highlight that this situation at NOUN’s Microfinance Bank reflects deeper governance and financial management issues within the institution.

Furthermore, the lack of a valid memorandum and articles of association, an unclear shareholder agreement, and undefined investment policies have made the bank vulnerable to internal disputes and external influences.

The bank’s reliance on the university’s student population for transactions makes it a valuable asset, which explains the battle for control. If left unresolved, this conflict could undermine the financial stability of the institution and even risk regulatory intervention from the Central Bank of Nigeria (CBN), especially given past crackdowns on struggling microfinance banks.

Only recently, NOUN MFB had narrowly escaped the CBN noose during the tenure of the former governor of the apex bank, Godwin Emefiele who revoked the licenses of many due to their erosion of capital and poor performance. Curiously, NOUN MFB was spared.

While these are noticeable setbacks for the NOUN MFB, the fight for control is a major issue that insiders say could further cripple the lender and move it away from accomplishing the set objectives.

As it is, the struggle for control over the NOUN Microfinance Bank (MFB), with some shareholders allegedly positioning themselves to take over from the founding majority stakeholders—the school and the cooperative society, is a huge battle ahead.

For now, there seems to be some external parties, deliberately waiting for signs of mismanagement to justify increasing their stake, aimed at control. The bank’s access to a captive market (students and staff of NOUN) is a key attraction to investors from outside the university.

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The big question is whether Prof. Femi Peters, whose tenure as Vice-Chancellor expires next year, will resist these external pressures or follow the path of his predecessor.

Dr. Isa Yuguda, as the current chair of NOUN’s governing council, might play a significant role in how this situation unfolds, which many observers are not sure anymore whether it is purely a business move, or political and personal interests at play?

NOTE: Calista is a Trainee-journalist who contributes regularly to DDNEWSONLINE.COM from the Department of Mass Communication, Ekocity Polytechnic, Lagos