CBN has revoked the operating licenses of 132 microfinance banks in the country, alongside those of four primary mortgage banks and three finance companies.
The Central Bank of Nigeria (CBN) has revoked the operating licenses of 132 microfinance banks in the country, alongside those of four primary mortgage banks and three finance companies.
This was contained in the official gazette of the Federal Government disclosed via its website on Tuesday.
According to the gazette, the licenses of the financial institutions were revoked due to non-compliance, it reads, “ceased to carry on in Nigeria, the type of business for which their licences were issued for a continuous period of six months; failed to fulfil or comply with the conditions subject to which their licences were granted; or failed to comply with the obligations imposed upon them by the Central Bank of Nigeria in accordance with the provisions of Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.”
It was noted that the CBN Governor, Godwin Emefiele, revoked the licenses in the exercise of the powers conferred on the Central Bank of Nigeria under Section 12 of BOFIA 2020, Act No. 5.
Here are the affected microfinance banks; Atlas Microfinance Bank, Bluewhales Microfinance Bank, Everest Microfinance Bank, Igangan Microfinance Bank, Mainsail Microfinance Bank, Merit Microfinance Bank, Minna Microfinance Bank, Musharaka Microfinance Bank, Nopov Microfinance Bank, Ohon Microfinance Bank, and others.
And the Finance companies who also lost its licenses were; HHL Invest & Trust Limited, TFS Finance Limited and Treasures & Trust Limited while the four primary mortgage banks whose licenses were revoked are – Resort Savings & Loans, Safetrust Mortgage Bank, Adamawa Savings & Loans and Kogi Savings & Loans.
However, Microfinance is a banking service provided to low-income individuals or groups who otherwise would have no other access to financial services. Microfinance allows people to take on reasonable small business loans safely, in a manner that is consistent with ethical lending practices but when it goes out of its context, the purpose would have been defeated.