The revocation of the operating licences of 46 microfinance banks by the Central Bank of Nigeria (CBN) has sparked concern among customers and small business owners, particularly in Kano State, where 13 of the affected institutions operated.
In a statement issued on Wednesday, the Central Bank of Nigeria announced that the licences were withdrawn with effect from July 1, 2026, after the affected banks failed to meet key regulatory requirements. The decision was approved by the CBN Governor, Olayemi Cardoso, in line with Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.
According to the apex bank, the affected institutions were found to have serious regulatory deficiencies, including inadequate assets to cover liabilities, prolonged inactivity, unauthorised closure of operations, failure to commence business within 12 months of receiving licences, and an inability to maintain the minimum capital requirement because of accumulated losses.
Reacting to the development, economist and lecturer at Federal University Dutse, Abdulnasir Turawa Yola, said the CBN does not revoke a bank’s licence without identifying significant financial or governance concerns.
“Whenever a bank’s licence is revoked, it means the CBN has detected a problem. It could be that the institution no longer meets the required capital base, or it may be facing serious management and corporate governance challenges,” he said.
Dr. Yola warned that although the Nigeria Deposit Insurance Corporation provides protection for depositors, customers could still suffer financial losses when a bank collapses. He explained that creditors are typically paid before depositors, while shareholders are often the last to receive any remaining assets.
Among the 46 affected institutions are 13 microfinance banks operating in Kano State: Zain MFB (formerly Dawakin Tofa MFB), Bompai MFB, Ajwa MFB (formerly Gezawa MFB), NOW Digital MFB, Minjibir MFB, Shanono MFB, Sumaila MFB, Rimin Gado MFB, Sycamore MFB, Tofa MFB, Kanopoly MFB, Bellbank MFB (formerly Tsanyawa MFB), and Esteem MFB.
The closures have generated mixed reactions among residents. While some believe the impact will be limited because the banks served relatively small customer bases, many entrepreneurs fear losing access to quick and affordable loans that commercial banks often do not provide.
One trader, Ibrahim Sulaiman, who runs an ice-selling business in Nasarawa Local Government Area of Kano State, said microfinance banks have been essential to the survival of small businesses.
“These banks often give us loans without much difficulty. Commercial banks have stricter conditions and usually focus on larger loans, while many of us only need between ₦50,000 and ₦100,000 to keep our businesses running,” he said.
The CBN’s decision is expected to increase scrutiny of Nigeria’s microfinance banking sector as customers await further clarification on how deposits and outstanding obligations will be handled.
