The Central Bank of Nigeria’s (CBN) recent crackdown on 46 microfinance banks has reignited industry calls to overhaul the country’s outdated microfinance guidelines amid shifting economic realities.
The latest regulatory action, which reduced the number of active microfinance banks in Nigeria to 962 from 1,008, came as the CBN intensified efforts to strengthen the resilience of the sector, protect depositors and ensure compliance with prudential standards.
The affected institutions lost their licences after failing to meet regulatory requirements for continued operation. According to the CBN, some of the reasons for the revocation included insufficient assets to meet liabilities, closure of operations without regulatory approval, inactivity and cessation of financial intermediation, failure to commence operations within 12 months of licence approval and failure to maintain the minimum capital funds unimpaired by losses.
The Nigeria Deposit Insurance Corporation (NDIC) has since commenced the verification and payment of insured deposits to customers of the failed institutions after taking over the banks as their statutory liquidator. The corporation said the exercise is intended to ensure an orderly resolution process and preserve confidence in Nigeria’s financial system.
