…as NDIC commences liquidation, verification of insured sums
By Precious Mark and Ismail Azeez
The Central Bank of Nigeria (CBN) has approved the revocation of the operating licences of 46 microfinance banks (MFBs) across the country with immediate effect.
This was dislcosed in a notice by Mrs. Hakama Sidi Ali, the Acting Director of the Corporate Communications Department at the CBN on Wednesday.
According to the apex bank, the operating licences of the affected institutions were withdrawn under the regulatory powers vested in the CBN Governor by Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
The revocation order became necessary following the banks’ failure to meet regulatory requirements.
This manifested as insufficient assets to meet financial liabilities, the outright closure of operations without CBN approval, and prolonged inactivity in financial intermediation.
Other key factors cited by the CBN include the failure of some institutions to commence banking operations within 12 months of receiving their licence approvals, alongside an inability to maintain minimum capital funds unimpaired by accumulated losses.
The apex bank stated that the aggressive regulatory cleanup is part of the central bank’s ongoing efforts to safeguard the stability of the Nigerian financial sector, protect depositors, and enforce strict compliance with current banking laws.
It further added that the CBN remains deeply committed to promoting a safe, sound, and resilient financial system, assuring the public that appropriate supervisory actions will continue to be executed to preserve public confidence in the nation’s financial institutions.
A breakdown of the affected financial institutions reveals that the closures heavily hit operations across several northern and southern states.
The impacted banks include Minji-Se Churchill MFB, Merchant MFB, Janmaa MFB, Busu MFB, Gold MFB, Zain MFB (formerly Dawakin Tofa MFB), Bompai MFB, NOW NOW DIGITAL MFB, Ajwa MFB (formerly Gezawa), Crystabel Microfinance Bank, Minjibir MFB, Shanono MFB, Sumaila MFB, Rimin Gado MFB, Mwaghavul MFB, Sycamore MFB, TOFA MFB, Safegate MFB, and Chanelle MFB.
Also affected by the regulatory directive are Abia SME MFB, Kamba MFB, Iwade MFB, Winview MFB, Zuru MFB, Creekline MFB, Bestar MFB, Livingspring MFB, Apple MFB, Stanford MFB, Frontline MFB, Zafec MFB, Supreme MFB, Bejin-Doko MFB, Kanopoly MFB, Bellbank MFB (formerly Tsanyawa), and Yeneng MFB.
The remaining liquidations hit corporate entities such as Creditville MFB, MBAG MFB, STRAIGHT SAHARA MFB, OURPASS MFB, VERDANT MFB, BASAWA MFB, CASHA MFB, ESTEEM MFB, ENTREPRENEUR MFB, and AVANTUS MFB, bringing a definitive end to their authorized operations across the federation.
Meanwhile, the Nigeria Deposit Insurance Corporation (NDIC) announced its official appointment as the liquidator for the 46 microfinance banks whose licenses were revoked.
The corporations’ intervention is backed by Section 12(2) of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 55(1 & 2) of the NDIC Act 2023.
In a press statement signed by the Head of the Communication and Public Affairs Department, Hawwau Gambo, the corporation explicitly warned the general public that the affected institutions are no longer authorized to conduct banking operations anywhere in Nigeria.
The regulatory body strongly cautioned individuals against attempting to remove, conceal, retain, or interfere with any assets, financial records, or physical properties belonging to the closed institutions.
The NDIC stressed that any unauthorized attempts to tamper with the banks’ assets constitute a direct violation of federal law and will attract severe legal consequences.
To protect the interests of vulnerable bank customers, the NDIC confirmed that it has already moved in to enforce an orderly closure and immediate physical takeover of the failed banks. Field teams are currently commencing the verification of depositor details to facilitate the prompt payment of insured sums to all eligible account holders.