NDIC to Conclude Liquidation of 89 Microfinance, Mortgage Banks After Transfer to New Owners

The Nigeria Deposit Insurance Corporation (NDIC) has announced plans to conclude the liquidation process of 89 microfinance banks and primary mortgage banks whose licences were revoked in 2023, following the successful transfer of their assets and liabilities to newly licensed institutions.

In a statement dated April 8, the corporation said the development marks a major step in resolving the failure of several small financial institutions and safeguarding depositors’ funds in the banking sector.

The affected banks were part of the 179 microfinance banks and four primary mortgage banks whose operating licences were withdrawn by the Central Bank of Nigeria (CBN) on May 22 and 23, 2023.

According to the NDIC, the apex bank has since granted licences to 89 new financial institutions to take over the operations of the defunct banks under the Purchase and Assumption (P&A) framework.

Under the arrangement, the newly licensed institutions acquired the assets and liabilities of the failed banks and have already commenced operations under different names.

Some of the affected banks have resumed operations under new identities across several states of the federation.

For instance, Mouau Vasmucs Microfinance Bank in Abia State now operates as Movasco-op Microfinance Bank, while Eduek Microfinance Bank in Akwa Ibom State has been rebranded as Mint Microfinance Bank.

Similarly, Arise Microfinance Bank in Lagos State now operates as Shine Microfinance Bank, while Banccorp Microfinance Bank has been taken over and renamed Bloc Microfinance Bank in the same state.

Other institutions include Greenland Microfinance Bank in Imo State, now operating as 5TT Microfinance Bank, and Iwoama Microfinance Bank in Rivers State, which has been renamed Tenn Bank.

The NDIC explained that the transition was carried out through formal Purchase and Assumption agreements designed to ensure continuity of banking services while protecting depositors.

To legally conclude the process, the corporation said it would approach various divisions of the Federal High Court across the country to obtain orders dissolving the defunct entities.

According to the NDIC, the court orders will formally release the corporation from its role as liquidator of the failed banks.

“In order to legally conclude the liquidation process, the NDIC will be presenting applications to various judicial divisions of the Federal High Court to obtain orders of dissolution for the closed banks and to release the corporation as liquidator,” the statement said.

The NDIC noted that it had already reimbursed depositors of the closed institutions, adding that the resolution process was carried out in line with its statutory mandate to protect depositors and maintain stability in the financial system.

Industry analysts say the adoption of the Purchase and Assumption model reflects a broader effort by regulators to strengthen Nigeria’s financial sector while minimising disruption to customers of failed banks.

The NDIC emphasised that the final dissolution of the defunct banks will bring closure to the resolution process and reinforce confidence in the country’s banking system.