The Central Bank of Nigeria (CBN) said on Wednesday it had revoked the operating licenses of 46 microfinance banks, citing failures ranging from insolvency to prolonged inactivity, as the regulator tightens oversight of the sector.
The revocations, effective immediately, were approved by CBN Governor Olayemi Cardoso under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA) 2020, the central bank said in a statement signed by Hakama Sidi-Ali, its acting director of corporate communications.
The CBN said the affected banks fell into one or more of five categories: having assets insufficient to cover liabilities; shutting down operations without central bank approval; ceasing financial intermediation activities; failing to commence operations within 12 months of receiving their license; and failing to maintain minimum capital funds unimpaired by losses.
“The revocation of the licenses is part of the Bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors, and ensure that licensed institutions comply with current laws and regulatory requirements,” the CBN said.
The regulator said it remained committed to a safe, sound and resilient financial system and would continue taking supervisory and regulatory action where necessary to maintain public confidence in Nigeria’s banking sector.
The CBN has periodically revoked licenses of underperforming microfinance banks and other financial institutions in recent years as part of a broader clean-up of Nigeria’s crowded microfinance banking space, which serves millions of low-income and small-business customers underserved by commercial banks.
