CBN CRACKDOWN: Licences of Merchant MFB, 45 others revoked over regulatory failures
In a major sweep aimed at sanitizing Nigeria’s financial sector, the Central Bank of Nigeria (CBN) has revoked the operating licences of Merchant Microfinance Bank and 45 other microfinance institutions across the country.
The enforcement action, which officially took effect on July 1, 2026, was triggered by the institutions’ failure to meet critical regulatory requirements necessary for continued operations.
Why the licences were revoked
According to a statement released on Wednesday by Hakama Sidi-Ali, the acting Director of Corporate Communications, the revocation order was approved by the CBN Governor, Olayemi Cardoso. The decision aligns strictly with Sections 12 and 13 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
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The apex bank clarified that the drastic measures became necessary due to multiple regulatory infractions by the affected microfinance banks (MFBs), including:
- Inadequate Capitalization: Failure to maintain minimum capital funds unimpaired by losses.
- Financial Distress: Insufficient assets to meet outstanding liabilities.
- Operational Cessation: Closure of operations without prior approval from the CBN, alongside inactivity and the total cessation of financial intermediation.
- Delayed Takeoff: Failure to commence banking operations within 12 months of receiving licence approval.
“The revocation of the licences is part of the Bank’s ongoing efforts to safeguard the stability of the financial sector, protect depositors, and ensure that licensed institutions comply with current laws and regulatory requirements,” the CBN statement noted.
Full list of affected microfinance banks
The 46 affected institutions span across various tiers and geopolitical zones, with a notable concentration in Kano and Lagos states. They include:
| State | Affected Microfinance Banks (MFBs) |
| Kano | Zain MFB (formerly Dawakin Tofa), Bompai MFB, Ajwa MFB, Now Now Digital MFB, Minjibir MFB, Shanono MFB, Sumaila MFB, Rimin Gado MFB, Sycamore MFB, TOFA MFB, Bellbank MFB (formerly Tsanyawa), Esteem MFB, Kanopoly MFB |
| Lagos | Gold MFB, Chanelle MFB (State-based), Safegate MFB, Supreme MFB, Creditville MFB, MBAG MFB, VERDANT MFB, Entrepreneur MFB |
| Abia | Merchant MFB, Abia SME MFB |
| Kebbi | Kamba MFB, Zuru MFB |
| Niger | Busu MFB, Bejin-Doko MFB |
| Plateau | Mwaghavul MFB (State-based), Yeneng MFB |
| FCT (Abuja) | Winview MFB, Casha MFB |
| Kaduna | Zafec MFB, Basawa MFB |
| Ogun | Iwade MFB, Apple MFB |
| Other States | Minji-Se Churchill MFB (Rivers), Janmaa MFB (Kwara), Chrystabel MFB (Bayelsa), Creekline MFB (Delta), Bestar MFB (Oyo), Livingspring MFB (Cross River), Stanford MFB (Akwa Ibom/Uyo), Frontline MFB (Anambra), Straight Sahara MFB (Benue), Our Pass MFB ( Ondo), Avantus MFB (Osun) |
The crackdown follows the expiration of the CBN’s recapitalization directive. In March 2024, the apex bank raised the capital base for financial institutions, granting them until March 31, 2026, to comply. Earlier in March 2026, the regulator had confirmed that only 30 banks successfully met the new minimum capital standard.
CBN limits payment suspensions on troubled banks to 2 days
In a parallel regulatory development, the CBN has issued a fresh circular designed to curb market uncertainty regarding failing financial institutions.
The apex bank has placed a strict two-business-day maximum limit on the suspension of payment obligations involving troubled banks or institutions under resolution.
The policy directive, dated July 1, 2026, was dispatched to all banks and financial institutions to clarify the application of Sections 34(2)(b) and 40(2) of the BOFIA 2020.
Previously, the central bank governor could suspend payment or delivery obligations for a failing bank, or temporarily block counterparties from terminating financial contracts. However, the lack of a defined legal duration for these interventions had created significant commercial risks and anxiety for market stakeholders.
The new circular clarifies that any such freeze or suspension:
- Must not exceed two business days starting from the date the written order or notice is issued by the CBN Governor.
- Applies uniformly to all “affected contracts” tied to institutions undergoing resolution measures.
With these dual moves, the apex bank reiterated its commitment to maintaining public confidence and reinforcing a safe, resilient financial ecosystem in Nigeria.
