The Central Bank of Nigeria (CBN) has withdrawn the licences of 46 microfinance banks nationwide, citing persistent breaches of regulatory standards and warning that the move is meant to protect depositors and strengthen oversight of the financial system. The decision takes effect immediately, the apex bank said in a statement released on Wednesday by its Acting Director of Corporate Communications, Hakama Sidi-Ali.
Key takeaways
- CBN revoked the operating licences of 46 microfinance banks across Nigeria for non-compliance.
- The licence withdrawals take effect immediately, following a CBN announcement made on Wednesday.
- The action was justified under the Central Bank’s authority in the Banks and Other Financial Institutions Act (BOFIA) of 2020.
- CBN cited issues ranging from weak capital and asset shortfalls to unauthorised closures and inactivity.
- The regulator said the step is aimed at safeguarding financial-sector stability and maintaining public confidence.
Why licences were revoked
The CBN said the revocations were carried out under Sections 12 and 13 of the BOFIA Act, 2020. It added that the affected microfinance institutions did not satisfy the conditions required to remain licensed, pointing to regulatory problems that, in the regulator’s view, undermined their ability to operate as regulated financial intermediaries.
In its explanation, the CBN listed several compliance failures identified among the banks. These included insufficient assets to cover liabilities, instances where operations were shut down without prior approval from the apex bank, and prolonged inactivity that resulted in the cessation of financial intermediation. The regulator also cited cases where business was not started within 12 months after a licence was issued, as well as failures to keep the minimum capital “unimpaired” by losses.
CBN links the move to depositor protection
CBN framed the decision as part of its supervisory responsibilities to keep the financial system stable and to ensure adherence to prevailing laws and regulatory requirements. It said the licence withdrawals are intended to safeguard the sector, protect depositors, and promote compliance by licensed institutions.
The statement further said the CBN remains committed to supporting “a safe, sound and resilient financial system,” adding that it will continue to take supervisory and regulatory measures where necessary to sustain confidence in Nigeria’s financial landscape.
Full list of affected banks
The full list of the 46 microfinance banks whose operating licences were revoked was referenced as following in the original announcement.
