The Central Bank of Nigeria (CBN) has revoked the licences of 46 microfinance banks in one of its most sweeping enforcement actions in recent years, citing widespread regulatory and financial compliance failures as it tightens management of the country's banking sector.
The revocations, effective from 1 July, impact tier 1, tier 2 and state microfinance banks across more than a dozen states, including Lagos, Kano, Abuja, Kaduna, Ogun and Rivers.
The apex bank said the affected institutions had breached one or more licensing conditions, including insufficient assets to meet liabilities, closure of operations without regulatory approval, prolonged inactivity, failure to commence operations within twelve months of licensing, and failure to maintain minimum capital unimpaired by losses.
The affected institutions include NowNow digital MFB, Creditville MFB, Safegate MFB, Sycamore MFB, Gold MFB and Entrepreneur MFB.
The CBN said the exercise follows a sector-wide compliance review and underscores its commitment to ensuring only financially sound institutions remain licensed.
The move comes after the completion of the commercial banks' recapitalisation exercise and signals that regulatory scrutiny has now shifted to Nigeria's microfinance banking segment.
This development could reshape the fintech ecosystem, where many startups have relied on acquiring existing microfinance banks to obtain deposit-taking and payments licences instead of applying for new ones.
Reacting to the development, Sycamore MFB said the revoked licence relates to a microfinance bank it acquired as part of its planned expansion into regulated banking services and reflects historical compliance issues that predate the acquisition rather than its current operations.
The fintech said its lending business, licensed by the Federal Competition and Consumer Protection Commission, and its investment arm, regulated by the Securities and Exchange Commission, remain fully operational, adding that customer funds and investments are secure.
The CBN also confirmed that Gold MFB had already entered liquidation, with its licence revoked separately on 21 May due to severe undercapitalisation and insolvency, reinforcing the regulator's tougher stance on non-compliant financial institutions.
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