The Central Bank of Nigeria (CBN) has revoked the operating licenses of 46 microfinance banks, effective July 1, 2026, citing multiple regulatory violations including under-capitalisation and prolonged inactivity. The decision, approved by CBN Governor Olayemi Cardoso under the Banks and Other Financial Institutions Act (BOFIA) 2020, is part of the apex bank's ongoing efforts to strengthen oversight of Nigeria's financial system and protect depositors.
Regulatory Breaches and Grounds for Revocation
In a statement signed by Acting Director of Corporate Communications Hakama Sidi-Ali, the CBN outlined ten specific reasons for the license withdrawals. These include failure to meet minimum capital requirements, inability to cover liabilities with assets, unauthorized cessation of operations, and prolonged dormancy. Additionally, some banks failed to commence business within 12 months of obtaining a license or did not comply with operational conditions and the BOFIA 2020.
Impact on Nigeria's Financial System
The CBN emphasized that the action is consistent with its commitment to maintaining a safe, sound, and resilient financial system. Microfinance banks play a crucial role in Nigeria's economy by providing financial services to low-income individuals, small businesses, and underserved communities. However, many have struggled with insufficient capital, poor corporate governance, and deteriorating loan portfolios amid persistent inflation and high interest rates.
According to the CBN statement: "The Central Bank of Nigeria remains committed to promoting a safe, sound and resilient financial system and will continue to take appropriate supervisory and regulatory actions, where necessary, to maintain public confidence in the Nigerian financial system."
Full List of Affected Banks
The CBN has released the complete list of the 46 microfinance banks whose licenses were revoked. The affected institutions failed to meet the requirements for continued operation as licensed financial institutions. This move follows a pattern of increased regulatory scrutiny, as the CBN has previously revoked licenses of other banks for similar infractions.
Context of Bank Regulation in Nigeria
Earlier in 2026, the CBN approved the commencement of operations for Bank78 MFB, a private digital lender designed to bridge the gap between fintech firms and traditional banks. This contrast highlights the regulator's dual approach: cracking down on non-compliant institutions while encouraging innovation in the sector.
The revocation underscores the challenges facing Nigeria's microfinance banking industry, which has been hit by economic headwinds including high inflation and interest rates. The CBN's action aims to weed out weak institutions and protect depositors from potential losses.
