CBN crackdown on microfinance banks to drive sector consolidation and deposit shift
via Punch Nigeria12 min read
The Central Bank of Nigeria CBN has revoked the operating licenses of 46 microfinance banks, effective July 1, 2026. This action, approved by CBN Governor Mr. Olayemi Cardoso, was taken due to various operational deficiencies, including insufficient assets, unauthorized business closures, prolonged inactivity, and failure to meet minimum capital requirements. The Nigeria Deposit Insurance Corporation NDIC has assumed responsibility for these banks as liquidator, advising the public against unauthorized transactions with the closed institutions and assuring stakeholders of a due process for liquidation and payment of insured sums to eligible depositors. Financial analysts at Meristem Securities believe this crackdown will lead to consolidation within the microfinance sector and a shift in retail banking deposits towards better-capitalized institutions. While the move aims to strengthen financial system resilience and protect depositors, the President of the Bank Customers Association of Nigeria, Professor Uju Ogubunka, expressed concerns about the immediate disruption to local credit systems and the potential negative impact on financial inclusion, particularly for market women, smallholder farmers, and small business owners. The revocations were concentrated in Kano and Lagos, highlighting broader structural weaknesses in the industry. Despite short-term challenges, the long-term impact is expected to be positive, improving market confidence and supporting a more resilient mi
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This summary was AI-generated from a story originally published by Punch Nigeria.
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