46 Microfinance Banks Lose Licences As CBN Tightens Grip

The Central Bank of Nigeria has revoked the operating licences of 46 microfinance banks across the country, deepening a regulatory purge that has now shut down more than 200 community lenders in three years.

The apex bank announced the decision in a statement issued on Wednesday and signed by its Acting Director of Corporate Communications, Hakama Sidi Ali. The revocation took effect from July 1, 2026, following the approval of the CBN Governor, Olayemi Cardoso, and was carried out under Sections 12 and 13 of the Banks and Other Financial Institutions Act, 2020.

“The Central Bank of Nigeria has revoked the operating licenses of forty six Microfinance Banks with effect from July 1, 2026, in accordance with its powers under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020,” the statement read.

According to the regulator, the affected institutions were found culpable of one or more infractions. These include insufficient assets to meet liabilities, closure of operations without CBN approval, prolonged inactivity and cessation of financial intermediation, failure to commence operations within 12 months of receiving licences, and failure to maintain the prescribed minimum capital unimpaired by losses.

The affected lenders cut across Tier 1, Tier 2 and State categories in states including Lagos, Kano, Abuja, Abia, Ogun, Kaduna, Niger, Plateau, Rivers, Bayelsa, Benue, Cross River, Delta, Kebbi, Kwara, Ondo, Osun, Oyo and Anambra. Among them are Gold, Creditville, Supreme, Winview, Merchant, Safegate and NOW NOW Digital Microfinance Banks. Kano recorded a heavy concentration, with Bompai, Minjibir, Shanono, Sumaila, Rimin Gado, Sycamore, TOFA, Kanopoly and Esteem Microfinance Banks all delicensed.

The exercise is not without precedent. In May 2023, the CBN under then Governor Godwin Emefiele revoked the licences of 179 microfinance banks, four primary mortgage banks and three finance companies over similar failures, while an earlier batch of 42 microfinance banks was closed in 2020. The recurring sweeps reflect longstanding challenges of undercapitalisation, weak governance and dormancy in a subsector created to serve low income earners and small businesses excluded from commercial banking.

What follows is now a familiar sequence. The Nigeria Deposit Insurance Corporation, as statutory liquidator under BOFIA 2020 and the NDIC Act 2023, is expected to verify depositors of the closed banks and pay insured sums, before declaring liquidation dividends from asset sales and debt recovery for claims above the insured limit. After the 2023 revocations, the corporation reported paying a cumulative N1.084 billion to 29,573 depositors of the closed institutions as of September that year.

Depositors this time enjoy stronger protection. Following the upward review of deposit insurance limits in May 2024, the NDIC Managing Director, Thompson Sunday, recently disclosed that more than 281 million depositors across 914 licensed financial institutions are covered, with over 98 per cent of depositors fully insured for their entire balances.

The CBN said the measure forms part of wider efforts to safeguard the financial system, protect depositors and enforce compliance, coming months after it confirmed in March 2026 that 30 banks had met the new minimum capital requirements ahead of the March 31, 2026 recapitalisation deadline.

“The Central Bank of Nigeria remains committed to promoting a safe, sound and resilient financial system and will continue to take appropriate supervisory and regulatory actions, where necessary, to maintain public confidence in the Nigerian financial system,” the statement said.

With the microfinance space still crowded and fragile, analysts widely expect further supervisory actions as the regulator continues to weed out distressed and dormant institutions.