By Musa Ibrahim
The Nigeria Deposit Insurance Corporation (NDIC) is set to seek court approval to formally wind down 89 microfinance and primary mortgage banks (PMBs) whose operations have already transitioned to new owners.
The Corporation disclosed that it will approach various divisions of the Federal High Court to obtain dissolution orders, a step that effectively closes the books on institutions previously resolved under its Purchase and Assumption framework. The move signals a shift from resolution to closure, as regulatory authorities tighten the structure of the country’s lower-tier banking system.
NDIC noted that the affected institutions were part of a broader intervention that followed the revocation of licences of 179 microfinance banks and four PMBs by the Central Bank of Nigeria (CBN) in May 2023. That action, one of the most extensive in recent years, was aimed at addressing persistent weaknesses in governance, capital adequacy and operational sustainability within the segment.
Under the NDIC’s resolution model, the distressed banks did not simply disappear. Instead, their assets and liabilities were transferred to newly licensed entities through Purchase and Assumption agreements. In practical terms, this ensured continuity for depositors while allowing stronger operators to take over viable portions of the failed institutions.
According to the Corporation, 89 new banks have since emerged from this process, each assuming the balance sheets of the defunct entities and commencing operations under new identities. This approach reflects a regulatory preference for stability, limiting systemic disruption while enforcing accountability.
With these transitions largely completed, the NDIC now seeks to be discharged from its role as liquidator. The court orders it is pursuing will formalise the dissolution of the old entities, marking the end of their legal existence and enabling the Corporation to conclude its liquidation responsibilities.
The significance of this development lies in what it reveals about regulatory direction. Nigeria’s financial authorities are not only resolving failing institutions but also restructuring the market to favour resilience. The microfinance and mortgage banking segments, often critical for financial inclusion, have faced recurring challenges ranging from weak risk management to inadequate capital buffers.
By combining licence revocation with structured asset transfers, regulators are attempting to reset standards without eroding public confidence. Depositors, in particular, are shielded through continuity arrangements, while new operators inherit both opportunity and responsibility.
A breakdown of the transitions shows the geographic spread of the reform. In Lagos, several defunct institutions such as Bridgeway Microfinance Bank and Mercury Microfinance Bank have re-emerged under new names and ownership structures. Similar changes have taken place across states including Anambra, Ogun, Kaduna and the Federal Capital Territory, reflecting a nationwide recalibration rather than a localised intervention.
In the Federal Capital Territory, for instance, entities like Mainsail Microfinance Bank and Ally Microfinance Bank have been replaced by new operators now carrying forward their financial intermediation roles. In northern states such as Kano and Kaduna, the restructuring has also introduced fresh institutions expected to operate under stricter regulatory expectations.
The NDIC’s decision to proceed with court-backed dissolution highlights the legal and procedural discipline required in bank resolution. Liquidation is not merely administrative. It is a judicial process that ensures transparency, creditor settlement and final closure in line with statutory requirements.
Beyond compliance, the exercise carries broader implications for market confidence. A clear and predictable resolution framework reassures investors and depositors that failures will be managed in an orderly manner. It also signals to operators that regulatory forbearance has limits.
