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The Nigeria Deposit Insurance Corporation has initiated the final phase of winding down 89 defunct Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs), marking a significant step in concluding its resolution process for failed institutions.
The move follows the revocation of licences by the Central Bank of Nigeria in May 2023, which impacted a total of 179 microfinance banks and four primary mortgage banks nationwide.
According to the Corporation, the affected institutions were resolved using the Purchase and Assumption (P&A) model, under which 89 newly licensed entities took over the assets and liabilities of the failed banks. These successor institutions have since commenced operations under new identities, ensuring continuity of services for customers.
Speaking on the development, Head of Communication and Public Affairs at NDIC, Hauwa Gambo, said the Corporation, in its role as liquidator, will now approach the Federal High Court to obtain legal orders for the formal dissolution of the defunct banks and discharge NDIC from its liquidation responsibilities, in line with statutory provisions.
Geographically, Lagos State accounts for the highest number of affected institutions, with 27 banks undergoing the wind-down process. Other states with notable figures include Osun State (seven), Anambra State (six), and the Federal Capital Territory (five). States such as Akwa Ibom State, Ogun State, and Adamawa State recorded four each, while several others had smaller numbers.
The NDIC noted that the exercise is designed to bring closure to the resolution cycle while safeguarding depositors’ funds and reinforcing stability within the financial system.
It added that the P&A framework has enabled seamless transition of operations, allowing customers in affected areas to continue accessing banking services without disruption under the new institutions.
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