The revocation of operating licenses of 46 microfinance banks across Nigeria, including 13 in Kano State, has sparked concern among customers and small business owners, with an economist warning that such regulatory action by the Central Bank of Nigeria often signals serious financial or governance issues.
In a statement issued on Wednesday, the CBN announced that the revocation took effect from July 1, 2026, under Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA), 2020.
The apex bank stated that the decision was approved by its Governor, Olayemi Cardoso, after the affected institutions failed to meet the regulatory standards required for continued operation.
According to the CBN, the affected banks were found to have one or more critical deficiencies, including inadequate assets to cover liabilities, unauthorized closure of operations, prolonged inactivity, failure to begin operations within 12 months of license approval, and inability to maintain minimum capital requirements due to accumulated losses.
Speaking on the development, economist and lecturer at Federal University Dutse, Dr. Abdulnasir Turawa Yola, said the CBN does not revoke a bank’s license without identifying major regulatory concerns.
“Whenever a bank’s license is revoked, it means the CBN has detected a problem. It could be that the institution no longer meets the required capital base, or it may be facing serious management and corporate governance challenges,” he said.
Dr. Yola warned that the collapse of financial institutions could expose depositors and investors to losses, despite intervention by the Nigeria Deposit Insurance Corporation.
“When a bank’s license is withdrawn, there are consequences. Although the NDIC compensates depositors, it is not always 100 per cent of their funds. Creditors are usually settled first, followed by depositors, while shareholders are often the last to be considered. It’s always a risky situation when a bank fails with customers’ money still inside,” he said.
The 13 affected microfinance banks in Kano include Zain MFB, formerly Dawakin Tofa MFB, Bompai MFB, Ajwa MFB, formerly Gezawa MFB, NOW Digital MFB, Minjibir MFB, Shanono MFB, Sumaila MFB, Rimin Gado MFB, Sycamore MFB, Tofa MFB, Kanopoly MFB, Bellbank MFB, formerly Tsanyawa MFB, and Esteem MFB.
While some residents believe the closures may have limited impact due to the relatively small customer base of the banks, small scale entrepreneurs fear reduced access to affordable credit.
Ibrahim Sulaiman, an ice seller in Nasarawa Local Government Area, said microfinance banks have played a crucial role in supporting small businesses.
“These banks often give us loans without much difficulty. Commercial banks have stricter conditions, making it hard for people like us to qualify, they also prefer to issue large loans running into millions of naira, whereas we usually need smaller amounts such as ₦50,000 or ₦100,000,” he said.
Efforts to get comments from officials of one of the affected microfinance banks were unsuccessful as of the time this report was filed.
