Microfinance or ‘micro-corrupt bank,’ CBN urged to differentiate

Judging by growing allegations of illegal microfinance banks in the country, the regulatory body of the microfinance sub-sector, which is the Central Bank of Nigeria (CBN), had been called upon to act fast in order to checkmate the activities of these operators. According to reported cases, illegal microfinance banks are on the rise, and innocent people meant to benefit from the services of these microfinance banks are now victims of fraud.
In addition, there are cases of other licensed banks closing down due to mismanagement of funds. For instance, PS Microfinance Bank, located at Ayo-Alabi Street, Oke-Ira, Ogba, was one of the illegal microfinance banks discovered to have embezzled millions of naira belonging to traders in Akute area of Lagos.
The victims include, Helen Eboh, Abdul hammed, a woman named Anifowose, and an old who claimed to have contributed over N100, 000 in the said bank, all described the experience as a painful one.
Another incidence occurred at the Almond Microfinance Bank Limited, located at Ijaniki area of Lagos, which closed down recently due to ‘insider-related abuses and poor corporate governance,’ which also embezzled millions of naira contributed by the downtrodden.
Some operators have however attributed the crisis to high profile lending, poor management, and corporate governance.
Nwankwo Martin, managing director and chief executive officer, Ikorodu Division Microfinance Bank Limited, Lagos, admitted that microfinance scheme should be the vehicle for developmental enhancement as seen in other countries, but in Nigeria, some individuals who consider themselves as smart always look for ways of turning things around in a negative way, which he said ought not to be.
“That is why we are witnessing some MFBs getting into problems today, even some big ones that are least expected. Some engage in high profile lending to make quick money. They live flamboyant lifestyles, with big buildings, and attractive vehicles. So that is where they missed it, and are having problems today,” he said.
However, Olufemi Fabamwo, acting director, Other Financial Institutions Department, CBN, proved ignorant of the closure of these microfinance banks, but made it clear to journalists during a meeting of the Committee Of Microfinance Banks in Nigeria (COMBIN), Lagos zone, which held recently that the regulatory body had already given out circulars to microfinance banks to display their licence in their various banking premises, so that members of the public would be able to know those that are licensed.
“We have already given out circulars to microfinance banks to display their licences in their banking premises, so that members of the public, who might want to do business with them would be able to discern and see. This would serve as notice to members of the public also to always ensure that they see a CBN licence or a letter granting final licence to MFBs before they transact any business with them. I think that is very important.”
For other illegal operators, however, Fabamwo stressed that as soon as information gets to them, they would be apprehended and handed over to appropriate law enforcement agency.
“It is a concerted effort; we need members of the public to help us to identify them. We are only a few hundreds of people, so members of the public can also help in fishing them out. Once they see any bank practising without licence, or did not display it, they should alert us immediately, so that we can hand them over to law enforcement agents.”
To further substantiate its intention, the CBN promised to publish names of licensed microfinance banks in order for the public to know those who are genuine and being supervised by CBN.
“Again, we also want to publish the list of licensed microfinance banks, so that members of public will be aware that these are being supervised by the central bank. But some of them are not literate enough or are not well to do enough to buy newspapers; hopefully, we will also do some jingles to advise them on what to do,” he said.

World Bank sanctions Lahmeyer International for corrupt activities in bank-financed projects

M2 PRESSWIRE-6 November 2006-WORLD BANK: World Bank sanctions Lahmeyer International for corrupt activities in bank-financed projects(C)1994-2006 M2 COMMUNICATIONS LTD

RDATE:06112006

PRETORIA, South Africa - The World Bank has declared Lahmeyer International GmbH (Lahmeyer), a German company, ineligible to be awarded Bank-financed contracts for a period of seven years, because of corrupt activities in connection with the Lesotho Highlands Water Project (LHWP).

The period of ineligibility may be reduced by four years if the Bank determines that Lahmeyer has met ...

will bank corrupcy in US create any problems for PR application

Hi Friends,

I recently applied for canadain PR.

I have a question related to bank corruption.

If i did bank corrupcy then will it create any problems for my canada PR application in any stage.

Please give your opinions about this.

Thanks

IS FORECLOSURE SAME AS BANK CORRUPCY???

In Reply to: IS FORECLOSURE SAME AS BANK CORRUPCY??? posted by MATHEWS on August 23, 2007 at 20:39:20:

Foreclosure is the process used by a lender once you stop making the required mortgage payments. The lender forecloses, and proceeds to take the house you gave as collateral for a loan. The process differs from state to state.

Bankruptcy is court ordered control of your finances and assets to determine which of your debts are repayable, which debts are dischargable, and how to assure maximum repayment to the creditors.

Many people whose mortgages are foreclosed upon seek bankruptcy relief, which may enable them to keep their home via a court ordered repayment plan, or to simply walk away.

Your question indicates you need some sound, professional advice... not just message board suggestions.

Make an appointment and speak withg a HUD approved credit counselor which should help point you in the right direction.

The Corrupt Origins of Central Banking

Mises Daily: Wednesday, November 05, 2008 by Thomas J. DiLorenzo


First Bank of the United States, Philadelphia, 1791Central banking has been a corrupt, mercantilist scheme and an engine of corporate welfare from its very beginning in the late 18th century. The first central bank, the Bank of North America, was "driven through the Continental Congress by [congressman and financier] Robert Morris in the Spring of 1781," wrote Murray Rothbard in The Mystery of Banking (p. 191). The Philadelphia businessman Morris had been a defense contractor during the Revolutionary War who "siphoned off millions from the public treasury into contracts to his own … firm and to those of his associates." He was also "leader of the powerful Nationalist forces" in the new country.

The main objective of the Nationalists, who were also known as Federalists, was essentially to establish an American version of the British mercantilist system, the very system that the Revolution had been fought against. Indeed, it was this system that the ancestors of the Revolutionaries had fled from when they came to America. As Rothbard explained, their aim was

To reimpose in the new United States a system of mercantilism and big government similar to that in Great Britain, against which the colonists had rebelled. The object was to have a strong central government, particularly a strong president or king as chief executive, built up by high taxes and heavy public debt. The strong government was to impose high tariffs to subsidize domestic manufacturers, develop a big navy to open up and subsidize foreign markets for American exports, and launch a massive system of internal public works. In short, the United States was to have a British system without Great Britain. (p. 192)

An important part of the "Morris scheme," as Rothbard called it, was "to organize and head a central bank, to provide cheap credit and expanded money for himself and his allies. The … Bank of North America was deliberately modeled after the Bank of England." The Bank was given a monopoly privilege of its notes being receivable in all tax payments to state and federal government, and no other banks were permitted to operate in the country. It "graciously agreed to lend most of its newly created money to the federal government," wrote Rothbard, and "the hapless taxpayers would have to pay the Bank principal and interest."

Despite these monopolistic privileges, a lack of public confidence in the Bank's inflated notes led to their depreciation and the Bank was privatized by the end of 1783. But Morris did not give up on his scheme. He recruited a young Alexander Hamilton to serve more or less as his political puppet within the Washington administration. (Rothbard called Hamilton "Morris's youthful disciple.") In fact, the reason why Hamilton became Treasury secretary, despite having no reputation at all in the field of finance, was the recommendation by Morris to George Washington. (During the Revolutionary War, when he was an aide to Washington, Hamilton took the time to write Morris a 30-page letter proclaiming that he agreed with every one of his ideas about protectionist tariffs, corporate subsidies, and a government-run bank to finance them.)

Morris and his fellow Nationalists wanted a king-like chief executive who would rule over a mercantilist empire, just as the king of England ruled over his mercantilist empire. They, of course, would be the ones to advise and instruct the "king" and benefit financially from such an empire. So their young protégé Hamilton commenced his seven-year crusade to overthrow the first US constitution — the Articles of Confederation — by calling for a new constitutional convention to supposedly "revise" the Articles of Confederation. At the convention, Hamilton laid out his (really Morris's) plan: a permanent president who would appoint all the governors and who would have veto power over all state legislation. Under such a plan, state sovereignty would have been destroyed, and there would have been no escape from the central government's high taxes, protectionist tariffs, heavy debt, and foreign-policy imperialism — the agenda of the Nationalists.

The Hamilton/Morris plan was defeated, of course, as was the proposal made at the convention to include a central bank among the delegated powers to the federal government. But the government was more highly centralized, as "the Nationalist forces pushed through a new Constitution" and "were on their way to re-establishing the mercantilist and statist British model…" (p. 193). They begrudgingly acquiesced in a Bill of Rights in return for the anti-Federalists' support for the new Constitution. And most importantly, writes Rothbard,

A critical part of their program was put through in 1791 by their leader, Secretary of the Treasury, Alexander Hamilton, a disciple of Robert Morris. Hamilton put through Congress the First Bank of the…. United States…. modeled after the old Bank of North America [whose]….longtime president and former partner of Robert Morris, Thomas Willing of Philadelphia, was made president of the New Bank.

In making his case to President Washington for the constitutionality of a central bank, which had been explicitly rejected at the constitutional convention, Hamilton invented the idea of "implied powers" of the Constitution. These were "powers" that were not expressly delegated to the federal government in the document, but could be "implied" by clever lawyers like Hamilton. This of course became a roadmap for the total destruction of constitutional limitations on the powers of the federal government.

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The First Bank of the United States "promptly fulfilled its inflationary potential," Rothbard writes in his History of Money and Banking in the United States (p. 69). It issued millions of dollars in paper money and demand deposits "pyramiding on top of $2 million in specie." The Bank invested heavily in the US government, and "The result of the outpouring of credit and paper money by the new Bank of the United States was … an increase [in prices] of 72 percent" from 1791–1796.

Northern merchants provided the main political support for Hamilton's Bank, whereas southern politicians like Jefferson supplied most of the opposition to it, seeing it as nothing more than a vehicle for financing an American version of the corrupt British mercantilist system, which would be destructive of liberty and prosperity. They were right, of course, and remain right to this day.

The Real Story of Money

by Loren Howe

“It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” - Henry Ford

“our citizens, their property and their labor, (are) passive victims to the swindling tricks of bankers and mountebankers." -Thomas Jefferson

You may have heard these quotes before, but have you truly considered what is being claimed? Were Henry Ford and Thomas Jefferson paranoid crackpots? Or perhaps, were they simply more aware than the average citizen? It’s an important question, not only from an historical perspective, but in direct relation to your personal wealth and freedom.

Few people understand the true nature of money and finance, and for that very reason, few people are able to gain or maintain wealth today. Instead, the average American lives in a state of servitude to a mortgage, taxes, and a job. At any moment, everything can be taken away if a constant cash flow is not paid. The middle class’ current situation is not very different from historical serfs or indentured servants. How did this happen and who is the beneficiary?

Look at the tallest buildings in any city or town throughout history. They always belong to the ruling class. Today, the skyline of most large cities is dominated by banks. Incredibly, all of this wealth was basically created out of nothing. That’s right, our enormous financial industry, which rules the country economically, has arguably never made a single product of value. Just remember, when nothing is created there must be a loser for every winner. The loser in this case has been the average American. Without even knowing it, the middle class has had its prosperity and freedom siphoned away to support the financial establishment.

I’ll try to give as simple an overview as possible for this purposefully complex system of wealth transference.

Today we refer to America’s Central Bank as the “Federal Reserve” because the name Central Bank had a bad connotation from experiences in Europe. The Central Bank is basically a quasi-government agency which takes its direction from consensus within both the Federal Government and the financial industry which it was created to serve. Regardless of who controls the Central Bank, its purpose is fairly straightforward once you cut through the opaque language and theory with which it disguises itself. The Federal Reserve/Central Bank’s overriding purpose is to create ever greater quantities of currency and inflation.

The creation of controlled inflation has proven immeasurably valuable to the banking industry and Federal Government at the expense of the American people.

First, how does the Central Bank create currency? Basically it just prints (or types into a computer) as much new currency as it wants. This currency is then “lent” out to the banking industry and the Federal Government. When these loans are repaid to the Central Bank, the money is just lent out again along with even more newly created currency.

A simplified example can help illustrate this purposefully complex process. One day the Central Bank may create $1,000,000,000 out of thin air. This $1,000,000,000 is then lent to a commercial bank (let’s call it Local Bank), at the Central Bank’s loan rate of say 5% annual interest on a one year loan. In turn, Local Bank loans the $1,000,000,000 to area businesses at a rate of 8% interest on one year loans. Ideally, at the end of the year, the business loans are repaid to Local Bank at a value of $1,080,000,000. Local Bank must now repay its loan from the Central Bank, which is $1,050,000,000 including interest. That leaves Local Bank a profit of about $30,000,000. Not bad for having produced nothing.

As you can see, this system insures profit for Local Bank regardless of inflation. Imagine an individual trying to lend money in competition with Local Bank. The wealthy person would lend his $1,000,000,000 at 8% interest and get a profit of around $80,000,000. Next the wealthy person, just like Local Bank, would subtract out taxes for a final profit rate of maybe 5%. So far so good right? The problem is, if inflation is greater than 5% then the wealthy person is losing money. If inflation gets extremely high at some point, then the wealthy person will be wiped out and quit the loan business. Local Bank, on the other hand, doesn’t have to worry about inflation. Local Bank is not using its own money. It is just playing with, and then repaying, the Central Bank’s money which was created out of nothing. After a while under this system, banks which are granted access to Central Bank funds are left as the only viable lenders. These banks are insured a virtual monopoly on the money loaning industry.

But that’s only half of the story. Part of the genius of the Central Bank system was that it also aided big government and the politically connected. This assured that big government would become dependent on the system and unable to change it.

First, the government takes “loans” directly from the Federal Reserve Central Bank but with one critical difference. The Central Bank gives back the interest “paid” on the loan. This is a convoluted way for the government to obtain perpetual zero interest loans – more correctly called free money. As if that were not enough, the US Treasury is also given the Federal Reserve’s interest charged to commercial banks on the money created out of thin air. This practice of giving the Central Bank’s interest to the government basically insures that all inflation on all money in existence is split as profit between both the government and the commercial banks. These benefits alone transfer a vast and well-hidden source of income to the government.

A simpler way for the government to achieve exactly the same result would be for the Treasury Department to print itself free money every year. However, this method would be more straightforward and citizens would intuitively realize that the resultant inflation robbed them of their savings and earning power. Secondly, this method of printing free government income would not allow commercial banks to also skim their percentage of the inflating money supply.

The government’s free benefits don’t end there, however. Next, as the currency inflates, the government’s zero interest debt obligation is gradually erased. This debt is continually rolled over and eventually inflates away to nothing.

Lastly, the government gains enormously in one more hidden way. Taxes on the public's savings are based on the imaginary “gain” from inflation. If a person owned a home or gold under a stable currency, the value would remain relatively constant. Under an inflating currency, however, the government is able to tax the “gain” on savings as their cost in dollars rises every year. Basically this amounts to a well-hidden tax on only those Americans who save money. The more you save, the more you are taxed. Is it any wonder our savings rate is now negative and the general population looks to the government rather than savings in difficult times?

Individuals under a Central Banking system have less money available for large purchases and must take out loans for nearly everything. The net result is an ever growing number of people who need loans in place of savings, and a banking industry with a virtual monopoly in issuing these loans. This system has fueled the financial industry’s immense profits without production.

The system of currency inflation being created, skimmed, and kept by banks and government may seem subtle. Some people don’t realize the damage done. Try to view the most simplified form. This process is the same as a counterfeiter printing money and earning a free living without producing anything. Imagine the simplified economy of a small town with it’s own currency. Imagine the town has all the normal industries plus a counterfeiter who can print as much free money as he likes. Guess what? First the value of the townspeople’s savings will be eaten up by inflated counterfeit currency. Next the counterfeiter will buy up all the valuable goods from the town’s producers. The working townspeople will have to work even harder to try to buy what’s left. But the harder they work and the more they produce, the more the counterfeiter can buy. Ultimately, the counterfeiter will be left as the only person in town with wealth. He will then have ultimate control over the town newspaper and government. It will become difficult to educate anyone or pass a law against counterfeiting. Unless the townspeople learn a method of personal or collective escape, they will be left in a state of servitude to the counterfeiter.

So there you have it. After less than a century under the present incarnation of this Central Banking system, we now have a middle class deeply in debt, a negative savings rate, an enormous but often unproductive government, and a wholly unproductive financial industry. What's more, our government has been in increasing stages of financial default for the last two generations and can no longer honor its previous pledges to redeem currency in gold or anything of value. Most amazingly, the entire structure of wealth transference was so well hidden and self-fulfilling, that few individuals grasp what is occurring or the negative impacts to society.

Before you get too depressed or angry about the situation however, it is important to remember one thing. Once you understand the system you can become wealthy.

Escape from theft will only hasten any parasitic system’s collapse. Communism, for example, wasn't defeated by a popular rebellion but by countless individuals gradually freeing themselves from economic exploitation until that system went broke. Once you understand how the Central Banking establishment operates, you can benefit immensely. There is not even a need to rally others towards a reform movement. You can simply watch your wealth and freedom grow while setting an example for others to follow.
The first questions I ask any investment (or other) advisor are about their success rate, training, and experience – so here is mine. I was fortunate, perhaps, to have no formal training in economics, and instead studied engineering. Everything I learned about money was self-taught and based on logic rather than economic theory. Over the last five years of investing I’ve averaged an annual rate of return over 20% and now have a net worth of around $2,000,000. What’s more, I’ve done this without a single day of debt and its associated anxiety.

In brief, to become wealthy you must first understand how the Central Bank robs your savings. Once you understand the multiple venues through which wealth is transferred to the banking establishment, you can cut off every one of them.

The next step is understanding and shielding yourself from conditioning by the press. Always remember, most “news” stories about investment are little more than paid advertisements initiated by press agents. Meaningless statements are repeated so often that they are taken as truth. For example, no one questions claims like, “the value of all stocks on the NYSE has increased 10,000% over the last 50 years” or, “the value of the Dow Jones Industrial Average has increased 5,000% over the last 50 years.” Yet, these are meaningless statements akin to saying, “the value of all houses in America has increased 10,000% in 50 years” or, “the value of the 30 biggest houses in America is now 5,000% greater than the value of the 30 biggest houses in 1950.” These misleading statements disregard the fact that houses are constantly being demolished and new ones built. If you had purchased a particular house 100 years ago it would likely be worthless rubble today, despite the fact that the average home is worth much more in inflated dollars. Looking past the financial industry's hype, stock analysis is an extremely complex field with an enormous number of variables. Let's try to simplify it. The fact is, nearly all corporations eventually go broke. If corporations didn't go broke the stock exchanges would be dominated by names like the British East India or Hudson Bay Company.

Popular investment “advice” generally leads people to take a gambler’s perspective. Experts herd investors into one sector or company this year and another next year - all the while stirring up commissions and giving the impression that investing is a fast paced and unpredictable field. Once you learn the basics of value investing and long term cycles, however, investing becomes much more of a science while retaining the potential for spectacular profit.

The final step in escaping financial exploitation is to understand the multiple ways in which brokers earn a living off of your savings. You gain little or nothing in return for paying a broker commission, so it is necessary to learn to minimize commissions and even outright broker theft whenever possible. After understanding and minimizing this last drag on wealth, you have achieved the basics of financial freedom.

In summary, most of us are born into an economic system stacked against us in ways which will never be advertised by the financial establishment. To gain real wealth, it is vital to understand the system. Knowledge and action can eventually give you an unimagined prosperity once your efforts are no longer subtly siphoned away by others. Hopefully this information will assist you in beginning or continuing to learn about a misunderstood topic - and eventually improving your life to enjoy the happy and fulfilling wealth and freedom which should be the birthright of everyone.

This article is condensed from, The Real Story of Money, Health, and Religion, by Loren Howe available in paperback or $1.25 download at http://www.lulu.com/content/592768

The Bank of England kept the hangman working day and night

The philosophy of the Bank or any bank is: LET THE MONEY DO THE WORK. However, the bankers worked the hangman to death because forging the counterfeit money was punishable with death. Men and women by the hundreds were hanged and even after the repeal of the law, the punishment was exile for life to Australia. If thebankers had lived at the time of Edward VI, they would have been the ones behind bars!!