- The Central Bank of Nigeria has revoked the licences of 132 microfinance banks.
- It also revoked the licences of another 47 microfinance banks for reasons related to not operating according to the guidelines under which their licences were issued.
- The CBN said some of the microfinance banks either did not continue business for up to six months or did not operate in accordance with the Banks and Other Financial Institutions Act.
The CBN said the microfinance banks whose licences have been revoked have either failed to “continue the type of business for which their licences were issued for a continuous period of 6 months,” failed to comply with the conditions stated in their licences or did not operate in “accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.”
What does this mean?
According to the conditions of revocation, as seen in the microfinance bank regulation draft, a company’s licence can be revoked for unauthorised closure.
This explains the CBN’s first reason for revocation — “ceased to carry on, in Nigeria, the type of business for which their licences were issued for a continuous period of 6 months.”
The second reason cited by the CBN—”failure to fulfill or comply with the conditions subject to which their licences were granted.”— can be interpreted as “engaging in non-permissible activities.”
Examples of non-permissible activities according to regulation draft include, facilitating foreign transactions, dealing in land for speculative purposes, and financing illegal activities.
Some of the microfinance banks
The information that was published on the CBN website had a list of the 132 financial institutions whose licences were revoked.
Some of the microfinance banks include Atlas Microfinance Bank, Virtue Microfinance Bank, Vibrant Microfinance Bank, Royal Microfinance Bank, Chidera Microfinance Bank, North Capital Microfinance Bank, Brass Microfinance Bank, and First Lady Index Microfinance Bank.
The finance companies whose licences were revoked are HHL Invest & Trust Limited, TFS Finance Limited, and Treasures & Trust Limited.
Primary mortgage banks with their licences revoked are Resort Savings and Loans, Safetrust Mortgage Bank, Adamawa Savings and Loan, and Kogi Savings and Loan.
According to another government notice on the CBN’s website, a different list of 47 microfinance banks also had their licences revoked.
They include Eyowo Microfinance Bank, Almond Microfinance Bank, Kogi Microfinance Bank, Jamis Microfinance Bank, New World Microfinance Bank, Greenland Microfinance Bank, and Fadama Farmers Microfinance Bank.
Could be a different Eyowo and Brass
Eyowo Microfinance Bank and Brass Microfinance Bank were listed as some of the banks whose licences have been revoked. It is important to note, however, that there are more than one microfinance banks that go by these names.
According to a PitchBook, there is an Eyowo Microfinance Bank, founded in 2007, formerly known as Bethesda, Bethesda MfB.
There’s also the more popular Eyowo owned by Nigerian technology company, Softcom
A fintech company known as Brass, also clarified on Twitter that it is not affiliated with Brass Microfinance Bank listed by the CBN.