The Central Bank of Nigeria (CBN) has directed Other Financial Institutions (OFIs) to immediately divest from all managed funds or products of what it described as uninsured entities. In a letter to OFIs, signed by the Director, OFIS Department, Nkiru Asiegbu, the CBN also said OFIs are prohibited from investing in managed funds or products of uninsured entities, adding that any existing placement(s) in such entities by an OFI must be liquidated by April 9, 2023. The letter partly reads: “The Central Bank of Nigeria has observed that a number of institutions in the Other Financial Institutions (OFIs) sub-sector have substantial assets invested in various funds managed by uninsured entities. “Most of these assets with uninsured entities are disguised as placements or investments in banks and other financial institutions. These transactions are not only outside the scope of permissible activities of OFIs but also place depositors’ funds at risk. “The high credit and liquidity risks involved in placements and investments in products or funds managed by uninsured entities on the OFIs and the entire sub-sector cannot be overemphasised, as the probability of recovery of the invested funds or compensation in any form, in the event of counterparty default, is extremely low.” New Telegraph reports that OFIs comprise Microfinance Banks, (MFBs) Development Finance Institutions (DFIs), Primary Mortgage Banks (PMBs) and Finance Companies (FCs).