NDIC Commences Final Liquidation Phase for 89 Closed Microfinance and Mortgage Banks
The Nigeria Deposit Insurance Corporation (NDIC) has officially initiated the process to conclude the liquidation of 89 microfinance banks (MFBs) and primary mortgage banks (PMBs). This marks the final phase in resolving these institutions, whose licences were previously revoked by regulatory authorities.
Background and Regulatory Actions
This development follows the revocation of licences for 179 MFBs and four PMBs by the Central Bank of Nigeria (CBN) in May 2023. Subsequently, selected institutions acquired the assets and liabilities of 89 of these defunct banks under a purchase and assumption arrangement, as confirmed by the NDIC.
Under this arrangement, new operators were issued licences to take over the operations of the affected institutions. These successor banks have since resumed business under different names across various states, ensuring continuity in financial services for customers.
Legal and Procedural Steps
The NDIC, acting in its capacity as liquidator, will approach the Federal High Court to obtain orders for the dissolution of the defunct banks and its discharge as liquidator. This action is in strict compliance with its enabling law and other relevant legal provisions, ensuring a transparent and lawful conclusion to the liquidation process.
Geographic Spread and Impact
The affected institutions are primarily microfinance banks operating across multiple states, reflecting the widespread presence of small-scale lenders within Nigeria's financial system. Key states include:
- Lagos
- Anambra
- Ogun
- Osun
- Ondo
- Akwa Ibom
- Oyo
- FCT
- Kaduna
- Delta
- Edo
- Kano
This move signals the conclusion of a resolution process that began after the regulatory actions in 2023. The transfer of assets and liabilities has already been completed, with successor institutions now fully operational, thereby stabilizing the financial sector and protecting depositor interests.
