CBN Explains Why It Revoked the Licences of 46 Microfinance Banks
The Central Bank of Nigeria (CBN) has revoked the operating licences of 46 microfinance banks across the country as part of its ongoing efforts to strengthen financial regulation and ensure stability within Nigeria’s banking sector.
The licence revocations officially took effect on July 1, 2026, following approval by the Governor of the Central Bank of Nigeria, Olayemi Cardoso, under the provisions of the Banks and Other Financial Institutions Act (BOFIA), 2020.
According to the apex bank, the affected institutions no longer satisfied the regulatory requirements necessary to operate as licensed microfinance banks.
Why the CBN Revoked the Licences
The CBN stated that the decision was based on one or more regulatory violations identified during its supervisory activities. These include:
• Failure to maintain the minimum capital required for operation.
• Insufficient assets to meet financial obligations and liabilities.
• Prolonged inactivity or the cessation of banking operations.
• Shutting down operations without obtaining regulatory approval.
• Failure to commence business within twelve months after receiving a banking licence.
The regulator explained that not every institution committed all of these violations. Instead, each licence was revoked based on one or more of the listed compliance failures.
According to the CBN, the enforcement action is intended to protect depositors, strengthen public confidence in Nigeria’s financial system, and ensure that only financially sound institutions continue operating.
Fintech Related Microfinance Banks Affected
Several technology driven financial institutions were also included in the list of affected microfinance banks, attracting significant attention within Nigeria’s fintech ecosystem.
Among them are:
• Sycamore Microfinance Bank
• NOW NOW Digital Microfinance Bank
• OurPass Microfinance Bank
• Creditville Microfinance Bank
• Casha Microfinance Bank
The inclusion of these institutions does not necessarily mean that all associated fintech businesses have ceased operations.
For example, Sycamore explained that the revoked licence belonged to a microfinance bank it acquired in 2024 during its regulatory restructuring process. The company stated that it now operates under a Finance Company Licence issued by the CBN, meaning its lending and financial services remain fully operational.
Strengthening Nigeria’s Financial Sector
The licence revocations reflect the CBN’s commitment to improving corporate governance, enforcing compliance, and building a safer banking environment.
Microfinance banks play an important role in providing financial services to individuals, entrepreneurs, and small businesses that may not have access to traditional commercial banking. However, many institutions within the sector have faced challenges such as inadequate capital, weak governance, operational inefficiencies, and poor risk management.
By removing non compliant institutions from the financial system, the CBN aims to improve the overall health and credibility of Nigeria’s banking industry.
What This Means for Customers
Customers of affected microfinance banks are advised to follow official communications from the CBN and the respective institutions regarding available options and any arrangements for customer accounts or outstanding obligations.
Customers of fintech companies operating under different valid regulatory licences should also verify official statements before assuming that their services have been affected.
CBN Continues Regulatory Reforms
The latest enforcement action comes amid broader regulatory reforms by the CBN aimed at strengthening Nigeria’s financial ecosystem. Recently, the apex bank also directed banks and fintech companies to localise payment data within Nigeria within a specified compliance period, reinforcing its focus on financial security, regulatory compliance, and digital infrastructure.
The revocation of these licences demonstrates the regulator’s determination to maintain a resilient, transparent, and well supervised financial sector that inspires confidence among investors, businesses, and the general public.
Frequently Asked Questions (FAQs)
1. Why did the CBN revoke the licences of 46 microfinance banks?
The CBN revoked the licences because the affected institutions failed to meet one or more regulatory requirements, including inadequate capital, insufficient assets, prolonged inactivity, or failure to comply with licensing conditions.
2. When did the licence revocations take effect?
The revocations became effective on July 1, 2026, following approval by the Governor of the Central Bank of Nigeria.
3. Does this mean all affected fintech companies have shut down?
No. Some fintech companies associated with the affected microfinance banks continue to operate under different CBN approved licences. Customers should rely on official announcements from each company.
4. How does this affect customers of the affected microfinance banks?
Customers should monitor official updates from the CBN and the affected institutions regarding their accounts, deposits, loans, and any transition arrangements.
5. What role do microfinance banks play in Nigeria?
Microfinance banks provide financial services such as savings accounts, loans, and business financing to individuals, small businesses, and underserved communities that may not have access to commercial banks.
6. What is the CBN trying to achieve with this action?
The CBN aims to strengthen financial stability, improve regulatory compliance, protect depositors, eliminate weak institutions, and build greater confidence in Nigeria’s banking system.
7. Can a revoked microfinance bank continue operating?
No. Once its operating licence has been revoked by the CBN, a microfinance bank can no longer legally operate as a licensed banking institution unless it obtains another valid regulatory licence where applicable.
8. How can customers verify whether a financial institution is licensed?
Customers can confirm the licensing status of banks, microfinance banks, and other financial institutions by checking the official publications and announcements released by the Central Bank of Nigeria.
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