The Central Bank of Nigeria revoked the operating licenses of 46 microfinance banks across the country, effective July 1, 2026, the bank announced Tuesday. According to CBN officials, the action was taken due to regulatory breaches, including insolvency, inactive operations, and failure to protect depositors’ funds, under the authority of the Banks and Other Financial Institutions Act.
The revocation was approved by Central Bank of Nigeria Governor Olayemi Cardoso and executed under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5, which grants the CBN authority to withdraw licences from financial institutions that fail to meet regulatory standards, officials said. The affected microfinance banks ceased to be authorised to conduct banking business from July 1, 2026, according to official statements signed by the CBN Acting Director of Corporate Communications, Sidi-Ali Hakama.
The Nigeria Deposit Insurance Corporation (NDIC) issued a public warning advising the public not to transact with the 46 microfinance banks, confirming that their licences had been revoked for failure to meet key regulatory requirements.
CBN cited several regulatory breaches as reasons for the revocations. The banks reportedly had insufficient assets to cover their liabilities, making them unable to protect depositors’ funds, the central bank stated. Some institutions closed operations without obtaining prior approval from the CBN, in violation of regulatory requirements. Others became inactive and ceased financial intermediation activities, no longer conducting the type of banking business for which they were licensed. Several banks also failed to commence operations within 12 months of obtaining their licences, breaching licensing conditions. Many did not maintain the minimum capital funds unimpaired by losses, a core prudential requirement for microfinance banks, records show.
NDIC also announced it had commenced takeover of the assets of the affected banks and initiated failure resolution processes, which may include liquidation and reimbursement of eligible depositors within insured limits.
The list of revoked institutions covers a broad geographic area. Kano State recorded the highest number, with 13 microfinance banks affected, followed by Lagos State with eight. Other states with revoked banks include Rivers, Bayelsa, Delta, Abia, Niger, Plateau, Kebbi, the Federal Capital Territory (Abuja), Ogun, and Anambra, among others. The affected banks operated in both urban and semi-urban locations, reflecting the wide reach of the microfinance sector in Nigeria. Examples of affected banks include Eyowo Microfinance Bank, Gold Microfinance Bank and Chanelle Microfinance Bank in Lagos, and Dakin Ta Microfinance Bank and Shanono Microfinance Bank in Kano, according to official lists and media reports.
CBN officials emphasized that the revocations are part of ongoing efforts to safeguard financial sector stability, protect depositors, and enforce compliance with banking regulations and licensing conditions. The action aligns with provisions in BOFIA 2020 that allow licence revocation where institutions cease operations for six months, fail to comply with licence conditions, or breach obligations imposed by the CBN.
Legal and policy analysts note that this enforcement action forms part of a broader clean-up of the microfinance subsector, targeting insolvency, inactivity, and poor corporate governance. Previous revocations under the same legal framework have included microfinance banks, finance companies, and primary mortgage banks. Sources familiar with the sector indicate that some operators had diverted funds, failed to file regulatory returns, or neglected proper risk management, prompting regulatory sanctions and licence withdrawals.
Following the revocations, the affected banks are required to cease all banking operations, including accepting deposits and granting loans, as they are no longer legally recognised financial institutions. NDIC’s involvement signals the commencement of failure resolution measures, which may involve asset takeover, liquidation procedures, and eventual reimbursement processes for depositors within insured limits.
The Central Bank of Nigeria’s action reflects a stricter supervisory stance in the microfinance sector, with increased likelihood of licence withdrawal for institutions that fail prudential or operational standards. The revocation of 46 microfinance banks adds to a growing record of regulatory enforcement aimed at strengthening the integrity and stability of Nigeria’s financial system.
Comments are closed.