NDIC winding down failed microfinance banks as it begins final phase of closing 89 defunct MFBs and PMBs across Nigeria

The Nigeria Deposit Insurance Corporation (NDIC) has begun the final phase of winding down 89 defunct Microfinance Banks and Primary Mortgage Banks across the country following their acquisition under its resolution framework.

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The development comes after the Central Bank of Nigeria (CBN) revoked the licences of 179 microfinance banks and four primary mortgage banks in May 2023 over regulatory concerns.

According to NDIC’s Head of Communication and Public Affairs, Hawwau Gambo, 89 new financial institutions were later licensed under the Purchase and Assumption model to take over the assets and liabilities of the affected banks and have since commenced operations under new identities.

NDIC, acting as liquidator, said it will now approach various divisions of the Federal High Court to secure formal orders dissolving the defunct entities and concluding its liquidation mandate in line with its enabling law.

Lagos State recorded the highest number of affected institutions with 27 banks, followed by Osun with seven, Anambra with six, and the Federal Capital Territory with five.

Other states impacted include Akwa Ibom, Ogun and Adamawa with four each, while Oyo, Kaduna, Edo and Niger recorded three each. Several other states recorded between one and two affected institutions.

The Corporation said the exercise is aimed at formally closing the resolution process while safeguarding depositors’ interests and ensuring continued stability in the financial system.

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It added that the transition under the Purchase and Assumption arrangement has allowed uninterrupted banking services in affected areas, as acquiring institutions have fully taken over operations of the defunct entities.