The Central Bank of Nigeria (CBN) has notified the public that it revoked the operating licenses of forty-six (46) Microfinance Banks (MFBs) in the country.

According to the statement signed by Hakama Sidi Ali (Mrs), the apex bank’s acting Director, Corporate Communications, the revocation was due to one or more factors, including:

• Insufficient assets to meet liabilities
• Closure of operations without the CBN’s approval.
• Inactivity and cessation of financial intermediation
• Failure to commence operations within 12 months of license approval
• Failure to maintain minimum capital funds unimpaired by losses.

The Apex Bank is empowered to revoke any bank’s license in accordance with Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.

Most of the affected MFBs, about 13, are located in Kano, followed by MFBs in Lagos, about 8. Tier 2 MFBs are the most affected, about 25, while Tier 1 MFBs are about 18. Three (6) of the affected banks are state MFBs.

Tier 1 Unit Microfinance Banks in Nigeria are authorized to operate in urban, banked, and high-density areas and are limited to four branches outside the head office within five contiguous local government areas, unless otherwise approved by the CBN. They are required to maintain a minimum paid-up capital of ₦200 million.

Tier 2 MFBs, on the other hand, are authorized to operate only in rural, unbanked, or underbanked areas and may open one branch outside the head office within the same Local Government Area (LGA), subject to CBN approval. They are required to maintain a minimum capital of ₦50 million.

Full List and Location of the 46 Microfinance Banks CBN Revoked Their Licenses

CBN claimed the action is necessary to ensure “a safe, sound and resilient financial system…to maintain public confidence in the Nigerian financial system”.