Banking Regulators Suspend Liquidation Of 132 MFBs, Seek New Investors
Nigeria’s banking regulators are seeking new investors for the 132 Microfinance banks whose licenses were revoked early this year, a move that suggests that the liquidation of the lenders may have been suspended.
The affected MFBs that cut across the federation were marked for liquidation by the Nigeria Deposit Insurance Corporation (NDIC) when the Central Bank of Nigeria (CBN) revoked their licences in May 2023 and gazetted the decision.
Findings by InsideBusinessNG however, show paucity of funds is one of the reasons for the u-turn from liquidating the financial institutions which the revocation order had rendered useless since May this year.
Owing to this, both the NDIC and the CBN, it was learnt, are currently asking interested investors and some promoters of the failed MFBs to come forward with plans to resuscitate them.
The CBN refused to respond to media inquiries on the issue but the spokesperson for the NDIC, Bashir Nuhu discountenanced funds but says the change in strategies is the reason for the new plan.
“Money to pay off the depositors is not the problem. The reason is that the Corporation want to discontinue liquidation but to strengthen financial institutions to prevent them from failing”, Nuhu said in a telephone conversation with InsideBusinessNG.
The Central Bank of Nigeria (CBN) in May 2023 announced the revocation of the licences of 132 MFBs, three finance banks and four primary mortgage banks. The revocation was gazetted under BOFIA 2020, by the apex bank which noted that “the firms have failed to comply with the conditions subject to which their licences were granted or failed to comply with the obligations imposed upon them by the CBN by the provisions of BOFIA 2020, Act No 5”.
Usually, after revocation of the licence, NDIC takes over by verifying the depositors to bring the affected institutions to a closure.
Checks at the NDIC also revealed that the NDIC has not announced the verification of the depositors of the MFBs that the CBN pronounced as failed in May this year. The only set of depositors that had been verified were those 42 MFBs whose licences were revoked in November 2020.
Top officials of some of the affected MFBs told InsideBusinessNG that they had met with the officials of the Corporation to table their resuscitation plans while they have also pleaded with the CBN to reopen them for business.
“I think they don’t want to disclose that they don’t have money to settle the depositors because we are confused about this sudden change of plans. Normally, NDIC ought to have invited the depositors for verification but we are yet to hear that”.
He wondered by the CBN would rush to gazette the revocation when the sister body, the NDIC is not prepared for the exercise.
“After we met with the NDIC, we were asked to write to the CBN also, telling the apex bank of our plans to resuscitate the microfinance banks. I and some of my colleagues have done that also”, the managing director of one of the MFBs told InsideBusinessNG.
Copies of the letters to the CBN, it was gathered, are also to be submitted to the Association of Micro-Finance Banks of Nigeria for documentation by the body which plans to discuss with the apex bank later.
Findings show that many of the MFBs dropped into insolvency owing to the Covid-19 pandemic which affected the business environment and the entire economy of the country.
Federal government in March 2020 ordered a two-month lockdown covering April and May to curb the spread of Covid-19 which the first casualty in the country was detected in Lagos. Data from Statista show that as of July 2022, positive coronavirus cases in Nigeria were 260,764 in total of which about 3.14 thousand were casualties and over 250 thousand recoveries. This makes Nigeria the eleventh-highest African country in terms of registered cases.
The MFBs focus on people in the lower rung of the economy and those in the rural communities these set of borrowers were badly affected by the 2020 lockdown during the pandemic.
“This set of people depended on daily income and were affected because the lockdown prevented them from working. The money they borrowed cannot be used for any productive venture during that period but only for feeding as they could not go out to work”, stated a top official of an MFB that is currently discussing with the two banking regulators.
Many of the affected MFBs denied receiving any form of support from the CBN during the Covid-19 period despite repeated assurances of support from the apex bank.
“We applied to the apex bank for palliative when it was announced and we were profiled and approved for the funds, but we never see any money up till the time that our licences were revoked”, noted a managing director of one of the affected MFBs.
The MFBs Whose Licences Were Revoked By The CBN In May 2023 are:
Atlas Microfinance Bank
Bluewhales Microfinance Bank
Everest Microfinance Bank
Igangan Microfinance Bank
Mainsail Microfinance Bank
Merit Microfinance Bank
Minna Microfinance Bank
Musharaka Microfinance Bank
Nopov Microfinance Bank
Ohon Microfinance Bank
Premium Microfinance Bank
Royal Microfinance Bank
Statesman Microfinance Bank
Suisse Microfinance Bank
Vibrant Microfinance Bank
Virtue Microfinance Bank
Zamare Microfinance Bank
North Capital Microfinance Bank
Chidera Microfinance Bank
Excellent Microfinance Bank
Ni’ima Microfinance Bank
Cosmopolitan Microfinance Bank
Progressive Link Microfinance Bank
Trust One Fomerly Desmonarchy
Ekuombe Microfinance Bank
First Index Microfinance Bank
Ola Microfinance Bank
Uli Microfinance Bank
Verdant Microfinance Bank
Aguleri Microfinance Bank Limited
Apeks Microfinance Bank Limited
Fahimta Microfinance Bank Limited
Manny Microfinance Bank Limited
Reality Microfinance Bank Limited
Surbpolitan Microfinance Bank Limited
Onyx Microfinance Bank Limited
Osina Microfinance Bank Limited
Olofin-Owena Microfinance Bank Limited
Zikado Microfinance Bank Limited
Prudential Cooperative Microfinance Bank Limited
Peniel Microfinance Bank Limited
Taraba Microfinance Bank Limited
Brass Microfinance Bank Limited
Michika Microfinance Bank Limited
Ndiagu Microfinance Bank Limited
Northbridge Microfinance Bank Limited
FCT Microfinance Bank Limited
Omu-Aran Microfinance Bank Limited
Cherish Microfinance Bank Limited
Bipc Microfinance Bank Limited
Danels Global Microfinance Bank Limited
Bancorp Microfinance Bank Limited
Manna Microfinance Bank Limited
Moneywise Microfinance Bank Limited
Mercury Microfinance Bank Limited
New Age Microfinance Bank Limited
Pearl Microfinance Bank Limited
Zawadi Microfinance Bank Limited
Seed Capital Microfinance Bank Limited
Eduek Microfinance Bank Limited
Eksu Microfinance Bank Limited
Dakingari Microfinance Bank Limited
Ogoja Microfinance Bank Limited
Nwabosi Microfinance Bank Limited
Nurture Microfinance Bank Limited
Active Point Microfinance Bank Limited
Amoye Microfinance Bank Limited
Boluwaduro Microfinance Bank Limited
Iyede Microfinance Bank Limited
Mayfair Microfinance Bank Limited
Calabar Microfinance Bank Limited
Ighomo Microfinance Bank Limited
Hackman Microfinance Bank Limited
Idese Microfinance Bank Limited
Bridgeway Microfinance Bank Limited
Grassroot Microfinance Bank Limited
Surelife Microfinance Bank Limited
Tijarah Microfinance Bank Limited
Ic-Global Microfinance Bank Limited
Ejiamatu Microfinance Bank Limited
Briyth Covenant Microfinance Bank Limited
Nanka Microfinance Bank Limited
Cub Microfinance Bank Limited
BFL Microfinance Bank Limited
Umunne Microfinance Bank Limited
Oroke Microfinance Bank
Alkaleri Microfinance Bank Limited
Crowned Eagle Microfinance Bank Limited
Unifa Microfinance Bank Limited
Dadinkowa Microfinance Bank Limited
Ifesowapo Microfinance Bank Limited
Oaf Microfinance Bank Limited
Bama Microfinance Bank Limited
Ngala Microfinance Bank Limited
Iwoama Microfinance Bank Limited
Kada Microfinance Bank Limited
Keffi Microfinance Bank Limited
Nut-Endwell Microfinance Bank Limited
First Multiple Microfinance Bank Limited
SBDC Microfinance Bank Limited
Oros Capital Microfinance Bank Limited
Ozizza Microfinance Bank Limited
Primera Credit Microfinance Bank Limited
Ifeanyichukwu Microfinance Bank Limited
Ihioma Microfinance Bank Limited
Josad Microfinance Bank Limited
Akpo Microfinance Bank Limited
Aiyepe Microfinance Bank Limited
ABC Microfinance Bank Limited
Star Microfinance Bank Limited
Purple Money Microfinance Bank Limited
Utuh Microfinance Bank Limited
Stallion Microfinance Bank Limited
Kjl Microfinance Bank Limited
Credit Afrique Microfinance Bank Limited
Cowries Microfinance Bank Limited
Lawebod Microfinance Bank Limited
Mabinas Microfinance Bank Limited
Business Support Microfinance Bank Limited
Ogbe-Ahiara Microfinance Bank Limited
Olofin Microfinance Bank Limited
Obosi Microfinance Bank Limited
Fiyinfolu Microfinance Bank Limited
Bishopsgate Microfinance Bank Limited
Awka Microfinance Bank Limited
Zigate Microfinance Bank Limited
Esan Microfinance Bank Limited
Enugu-Ukwu Microfinance Bank Limited
Echo Microfinance Bank Limited
Ally Microfinance Bank Limited
Network Microfinance Bank Limited
Awgbu Microfinance Bank Limited
FINANCE COMPANIES LICENCES REVOKED
HHL Invest and Trust Limited
TFS Finance Limited
Treasures and Trust Limited
PRIMARY MORTGAGE BANKS LICENCES REVOKED
Resort Savings and Loans
Safetrust Mortgage Bank
Adamawa Savings and Loans
Kogi Savings and Loans
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