Nigeria’s central bank has revoked the operating licences of 47 microfinance banks, including digital banking units linked to fintech firms, in one of the biggest cleanups of the sector in recent years as regulators tighten oversight of financial institutions.
The Central Bank of Nigeria (CBN) said it withdrew the licences of 46 microfinance banks with immediate effect on Wednesday. Together with Goldfish Microfinance Bank, whose licence was suspended in May and disclosed by the regulator on June 30, the total number of affected institutions rose to 47.
The CBN said some of the institutions no longer had sufficient assets to cover their liabilities, others had ceased operations without regulatory approval, become inactive or never commenced business after obtaining licences.
The affected lenders include Creditville Microfinance Bank, Gold Microfinance Bank, NowNow Digital Microfinance Bank and Sycamore Microfinance Bank.
Microfinance banks play a key role in Nigeria’s financial system by providing banking services to individuals and small businesses that are often underserved by commercial banks. In recent years, they have also become an important part of the country’s fast-growing fintech industry, with companies acquiring licensed microfinance banks to gain access to banking and payments infrastructure rather than applying for new licences.
Companies including Paystack and Flutterwave have used acquisitions to expand into regulated financial services.
Sycamore’s inclusion on the list drew attention after the fintech announced in May that it had acquired a microfinance bank in Kano to expand from digital lending into banking and payments. Sycamore has since said the licence revocation relates to legacy issues at the acquired institution.
The latest action reflects Governor Olayemi Cardoso’s efforts to strengthen regulation of Nigeria’s financial sector following years of rapid growth in digital financial services.
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Faustine Ngila is the AI Editor at Impact Newswire, based in Nairobi, Kenya. He is an award-winning journalist specializing in artificial intelligence, blockchain, and emerging technologies.
He previously worked as a global technology reporter at Quartz in New York and Digital Frontier in London, where he covered innovation, startups, and the global digital economy.
With years of experience reporting on cutting-edge technologies, Faustine focuses on AI developments, industry trends, and the impact of technology on society.
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