The Central Bank of Nigeria (CBN) has revoked the operating licenses of 46 microfinance banks with effect from July 1, 2026, a move approved by Governor Olayemi Cardoso and disclosed in a statement by Acting Director of Corporate Communications Hakama Sidi-Ali. The withdrawals, carried out under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020, form part of the apex bank’s ongoing cleanup of non-performing and non-compliant institutions to safeguard financial stability and protect depositors. The CBN said the affected banks failed to meet one or more regulatory conditions; including insufficient assets to meet liabilities, closure of operations without CBN approval, inactivity or cessation of financial intermediation, failure to commence operations within 12 months of license issuance, and failure to maintain minimum capital unimpaired by losses.
The affected institutions span Tier 1, Tier 2 and state microfinance bank categories, showing the exercise reached banks of different sizes and capital thresholds. Kano recorded the highest number of revocations (13), followed by Lagos with nine, while other withdrawals touched banks in states including Niger, Ogun, Kebbi, Kaduna, the Federal Capital Territory and several southern and central states. Several of the listed banks had previously rebranded before losing their licenses. The action continues a pattern of increased oversight that included a larger revocation exercise in May 2023, when 179 licenses were cancelled (132 microfinance banks) for reasons such as prolonged cessation of operations and failure to meet BOFIA conditions.
In a related move, the CBN’s Financial Markets Department issued an immediate-effect circular clarifying the practical application of Sections 34(2)(b) and 40(2) of BOFIA. The guidance limits the suspension of payment, delivery obligations and counterparties’ termination rights under contracts involving failing banks to a maximum of two business days. The circular, signed by Acting Director Okey Umeano and issued under the governor’s interpretative powers (Section 56 of BOFIA and Section 33(1)(b) of the Central Bank of Nigeria Act, 2007), was intended to remove uncertainty created by the absence of a defined time limit in the statute and to help counterparties manage commercial risk more effectively.
