The Nigeria Deposit Insurance Corporation (NDIC) has formally begun the liquidation of the 46 Microfinance Banks (MFBs) whose operating licences were revoked by the Central Bank of Nigeria (CBN) and has announced the commencement of depositor verification and payment processes for eligible customers.
The development follows the decision of the CBN on Wednesday, July 1, 2026, to withdraw the operating licences of the affected institutions under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.
In a statement on Wednesday by the Head of the Communication and Public Affairs Department of the NDIC, Hawwau Gambo, the Corporation said it had been appointed as the official liquidator of the failed institutions in line with Section 12(2) of BOFIA 2020 and Sections 55(1) and 55(2) of the NDIC Act 2023.
The Corporation said the affected banks are no longer legally authorised to carry out banking operations in Nigeria and warned members of the public against engaging in any transactions with the institutions.
NDIC also cautioned individuals against removing, concealing, retaining, or interfering with the assets, records, and property belonging to the closed banks, stressing that such actions could amount to violations of existing laws and attract legal consequences.
The takeover marks the next phase of regulatory intervention following the CBN’s supervisory action against the microfinance institutions.
In its earlier revocation order, the apex bank explained that the affected institutions failed to meet the regulatory requirements necessary to sustain operations as licensed financial institutions.
According to the CBN, the action became necessary due to one or more regulatory concerns, including insufficient assets to meet liabilities, closure of operations without approval, prolonged inactivity and cessation of financial intermediation, failure to commence operations within 12 months of licence approval, and inability to maintain minimum capital funds unimpaired by losses.
The revocation affected microfinance banks across several states, with Kano accounting for the highest number of closures, reflecting growing regulatory pressure on operators considered unable to meet prudential standards and operational obligations.
NDIC said it has already commenced the orderly closure process through immediate takeover of the failed institutions as well as verification and payment of insured deposits to eligible customers.
The Corporation assured depositors and the general public that further information would be provided as the liquidation exercise progresses and additional steps become necessary.
The latest development reinforces ongoing efforts by financial regulators to strengthen confidence in Nigeria’s banking system through tighter supervision, depositor protection and enforcement of compliance requirements among licensed financial institutions.
Industry stakeholders say the intervention is expected to accelerate consolidation within the microfinance segment while improving resilience and governance standards across the broader financial services sector.
