The Central Bank of Nigeria, CBN, has revoked the operating licenses of 46 microfinance banks across the country, marking one of its most significant regulatory actions in recent years as it continues efforts to strengthen Nigeria’s financial system.
The decision, which took effect on July 1, 2026, was approved by the Governor of the Central Bank of Nigeria, Olayemi Cardoso, under the powers granted by Sections 12 and 13 of the Banks and Other Financial Institutions Act, BOFIA, 2020. According to the apex bank, the affected institutions failed to meet the regulatory standards required to continue operating as licensed financial institutions.
Why the CBN Revoked the Licenses
In its official statement, the CBN outlined several reasons for the revocation, noting that the affected banks were found to have breached one or more key regulatory requirements.
These include:
- Insufficient assets to meet liabilities.
- Closure of operations without obtaining CBN approval.
- Inactivity and cessation of financial intermediation.
- Failure to commence operations within 12 months of receiving a banking licence.
- Failure to maintain the minimum capital required for continued operations.
The regulator said the move forms part of its ongoing supervisory efforts to maintain a stable and resilient financial system while ensuring licensed financial institutions comply with existing laws and prudential guidelines.
“The revocation of the licenses is part of the Bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors, and ensure that licensed institutions comply with current laws and regulatory requirements,” the CBN stated.
What BOFIA 2020 Says
The Banks and Other Financial Institutions Act, 2020 gives the CBN broad powers to supervise banks and other financial institutions operating in Nigeria.
Sections 12 and 13 empower the apex bank to revoke the licence of any financial institution that becomes financially unsound, fails to meet regulatory obligations, or no longer satisfies the conditions under which its licence was granted.
These provisions are designed to ensure that only financially healthy institutions remain in operation, reducing systemic risk and protecting customers’ deposits.
Digital and Traditional Microfinance Banks Affected
The affected institutions span several states, including Lagos, Kano, Abuja, Ogun, Kaduna, Rivers, Bayelsa, Delta, Plateau, Osun, Oyo, Benue, Cross River, Anambra, Niger, Kebbi, Kwara, Ondo, and Abia.
Among those listed are both traditional community based microfinance banks and institutions operating with digital banking models.
Notably, NOW NOW Digital MFB is among the institutions whose licence has been revoked, highlighting that the regulatory action extends beyond conventional brick and mortar operators. Other affected institutions include Creditville MFB, Gold MFB, Safegate MFB, MBAG MFB, Entrepreneur MFB, Verdant MFB, Supreme MFB, Apple MFB, and several others.
The inclusion of digital focused operators underscores the CBN’s emphasis on ensuring that innovation in financial services does not come at the expense of regulatory compliance.
What This Means for Customers
For customers of the affected microfinance banks, the announcement is likely to raise concerns about access to deposits, loans, and other banking services.
Although the CBN’s statement did not outline the next steps for customers, regulatory actions of this nature are typically followed by processes involving the Nigeria Deposit Insurance Corporation, NDIC, which manages insured deposits and liquidation procedures where necessary.
Customers are expected to await further guidance from the relevant authorities regarding claims, outstanding obligations, and the winding down of affected institutions.
Businesses and SMEs that relied on these banks for working capital, payroll services, or credit facilities may also need to seek alternative financial partners.
Implications for Nigeria’s Fintech Ecosystem
The revocation also carries implications for Nigeria’s rapidly evolving fintech landscape.
Microfinance banks play an important role within the country’s digital finance ecosystem. Many fintech companies partner with licensed microfinance banks to offer savings products, digital wallets, agency banking services, and embedded financial solutions.
While the CBN’s action may temporarily affect partnerships involving the affected institutions, it also reinforces the regulator’s commitment to ensuring that technology enabled financial services are built on compliant and financially stable foundations.
For fintech startups seeking banking partners, the development serves as a reminder that regulatory due diligence remains as important as technological innovation.
A Stronger Push for Regulatory Compliance
The latest enforcement action aligns with the CBN’s broader objective of improving governance, strengthening capital adequacy, and enhancing public confidence in Nigeria’s financial system.
In recent years, the apex bank has increased its supervisory activities across commercial banks, payment service providers, fintech firms, and microfinance institutions as digital financial services continue to expand.
Industry analysts have consistently argued that stronger oversight helps eliminate weak institutions that could expose customers to unnecessary financial risks while encouraging healthier competition among compliant operators.
Financial Inclusion Must Be Matched by Stability
Microfinance banks have been central to Nigeria’s financial inclusion strategy by extending banking services to underserved communities, small businesses, and individuals who often lack access to traditional commercial banks.
However, financial inclusion can only be sustainable when institutions maintain adequate capital, strong governance, and sound risk management practices.
The CBN’s latest decision signals that expanding access to financial services must go hand in hand with maintaining the integrity and resilience of the banking system.
READ ALSO: CBN Orders Banks and Fintechs to Store Payment Data in Nigeria by January 2027
Looking Ahead
The Central Bank of Nigeria says it remains committed to promoting a safe, sound, and resilient financial system and will continue taking supervisory and regulatory actions whenever necessary to maintain public confidence in Nigeria’s banking industry.
For affected customers, further announcements from the CBN and the Nigeria Deposit Insurance Corporation will be crucial in determining the process for accessing insured deposits and resolving outstanding obligations.
More broadly, the revocation of 46 microfinance bank licences sends a clear message to financial institutions operating in Nigeria: regulatory compliance, adequate capitalization, and operational transparency are no longer optional. As the country’s financial services industry becomes increasingly digital, institutions that fail to meet prudential standards are likely to face intensified scrutiny from regulators.
