The Nigeria Deposit Insurance Corporation (NDIC) has begun the process of concluding the liquidation of 89 failed microfinance banks (MFBs) and primary mortgage banks (PMBs) after their acquisition by new investors under the Purchase and Assumption (P&A) resolution framework.
The affected institutions were among 179 microfinance banks and four mortgage banks that lost their licences on May 22 and 23, 2023, after failing to meet regulatory and prudential requirements set by the apex bank, according to the NDIC.
Besides, the 89 new investors were subsequently licensed by the CBN to acquire the assets and liabilities of the defunct institutions under the Purchase and Assumption arrangement, enabling them to resume operations under new corporate identities.
The resolution model is widely used globally to ensure that depositors continue to access their funds while preserving financial stability when banks fail.
After the successful takeover and commencement of operations by the successor institutions, the NDIC said it is now taking steps to legally conclude the liquidation process.
“As part of the process of concluding the liquidation in line with the provisions of our enabling Act and other applicable laws, the NDIC, in its capacity as liquidator, will approach various judicial divisions of the Federal High Court to obtain orders dissolving the defunct banks and releasing the Corporation as liquidator,” the corporation said.
The process will formally terminate the failed banks’ existence and complete the regulatory clean-up of the affected institutions.
Several new microfinance banks have already emerged from the resolution exercise across different states.
These include MOVASCO-OP Microfinance Bank in Abia State, Mint Microfinance Bank in Akwa Ibom, Oganiru Microfinance Bank in Anambra, and several new operators in Lagos, such as Kaizen Microfinance Bank, Stable Microfinance Bank, and Unicorn Microfinance Bank.
The NDIC’s intervention is also expected to protect depositors and maintain continuity of financial services, particularly for small businesses and low-income earners who rely heavily on microfinance institutions.