Microfinance and mortgage institutions to be dissolved as regulators complete sector clean-up….
The Nigeria Deposit Insurance Corporation has begun the final phase of winding down 89 failed financial institutions, marking a significant step in Nigeria’s ongoing banking sector reforms.
In a statement issued by its Head of Communication and Public Affairs, Hawwau Gambo, the corporation confirmed that the affected microfinance and primary mortgage banks had already been successfully resolved through its Purchase and Assumption (P&A) framework.
The move follows the earlier intervention by the Central Bank of Nigeria, which revoked the licences of the institutions in May 2023 as part of a broader effort to strengthen the financial system and eliminate weak operators.
According to the NDIC, the 89 institutions were among a larger group of 179 microfinance banks and four primary mortgage banks shut down by the apex bank during that period.
Rather than allowing a complete collapse, the regulator facilitated a transition process. Under the P&A arrangement, newly licensed and financially stronger institutions took over the assets and liabilities of the failed banks, ensuring that customers retained access to their funds and banking services.
The NDIC disclosed that these successor institutions are already operational, having assumed control under new identities. This approach, it noted, helped preserve confidence in the financial system while minimising disruption to depositors.
With the transition phase largely completed, the corporation is now turning to the legal closure of the defunct entities. It plans to approach various divisions of the Federal High Court to secure formal dissolution orders and conclude its role as liquidator.
The affected banks are spread across multiple states, including Lagos, Anambra, Ogun, Oyo, Kaduna, Kano, Akwa Ibom, and the Federal Capital Territory highlighting the nationwide scale of the clean-up exercise.
Several institutions have already re-emerged under new ownership and branding. For instance, Arise Microfinance Bank now operates as Shine Microfinance Bank in Lagos, while Banccorp Microfinance Bank has transitioned into Bloc Microfinance Bank. Credit Afrique Microfinance Bank has also been restructured and now runs as Kaizen Microfinance Bank.
Similar changes have taken place across other regions, reflecting a broader restructuring effort aimed at building a more resilient and efficient banking ecosystem.
The NDIC emphasized that the clean-up is part of its statutory mandate to maintain stability, protect depositors, and ensure orderly resolution of failing financial institutions.
As the process moves toward completion, regulators say the focus will remain on strengthening oversight and preventing a recurrence of widespread bank failures in the microfinance and mortgage segments.
The latest action underscores a clear message from authorities: Nigeria’s financial system is being reshaped to prioritise stability, accountability, and long-term sustainability.
