By Damilare Adeleye
The Nigeria Deposit Insurance Corporation (NDIC) has commenced the final process of winding down 89 defunct Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs) across the country following their acquisition by new owners.
In a statement released on Wednesday, the Corporation disclosed that the affected institutions were among the 183 banks comprising 179 MFBs and four PMBs whose operating licenses were revoked by the Central Bank of Nigeria (CBN) in May 2023 due to regulatory infractions and financial instability.
The NDIC explained that the closures were resolved using the Purchase and Assumption (P&A) model, a globally recognized bank resolution mechanism designed to ensure the continuity of banking services while protecting depositors.
Under this arrangement, 89 newly licensed financial institutions acquired the assets and liabilities of the failed banks and have since commenced operations under different corporate identities.
“To legally conclude the liquidation process in accordance with the provisions of its enabling Act and other relevant laws, the NDIC in its capacity as the liquidator of the defunct banks will present applications to various judicial divisions of the Federal High Court to obtain orders of dissolution for the closed banks and to discharge the Corporation as liquidator,” the statement read in part.
This transition is intended to safeguard depositors’ funds and preserve confidence in the financial system.
The affected banks span several states, including Lagos, Anambra, Akwa Ibom, Delta, Edo, Ogun, Imo, Enugu, Ekiti, and Abia. Notable transitions include Arise Microfinance Bank becoming Shine Microfinance Bank, BancCorp Microfinance Bank becoming Bloc Microfinance Bank, and Hackman Microfinance Bank transitioning to Lightway Microfinance Bank.