NDIC Begins Final Legal Process to Wind Up 89 Failed Microfinance and Mortgage Banks

The Nigeria Deposit Insurance Corporation (Nigeria Deposit Insurance Corporation) has begun formal steps to conclude the liquidation process of 89 closed Microfinance Banks (MFBs) and Primary Mortgage Banks (PMBs), in what is being described as one of the most extensive banking sector resolution exercises in recent years.
The move follows the successful execution of the Purchase and Assumption (P&A) framework, under which viable financial institutions acquired the assets and liabilities of the failed banks, ensuring operational continuity and reducing disruption to depositors and customers across the country.
In a statement issued by the Head of Communication & Public Affairs, Hawwau Gambo, the Corporation confirmed that the affected institutions are part of a wider set of 179 Microfinance Banks and 4 Primary Mortgage Banks whose licences were revoked by the Central Bank of Nigeria (Central Bank of Nigeria) on May 22 and 23, 2023.
According to the NDIC, following the regulatory action, the apex bank approved and issued fresh licences to 89 eligible successor institutions, allowing them to assume control of the operations, assets, and selected liabilities of the defunct entities under the structured P&A arrangement.
These successor banks have since commenced operations under new names and governance structures, effectively absorbing customer accounts and stabilising services in affected communities across Nigeria.
With operational transition largely completed, the NDIC has now shifted focus to the legal closure phase of the process. As liquidator of the failed institutions, the Corporation is preparing to approach various Judicial Divisions of the Federal High Court to obtain dissolution orders.
The court orders, once granted, will formally wind up the defunct institutions and discharge the NDIC from its statutory responsibilities as liquidator, thereby bringing finality to the resolution process.
Financial sector analysts say the exercise reflects a more structured and proactive approach to bank failure management in Nigeria, particularly within the fragile microfinance and primary mortgage banking segments, which have historically been vulnerable to governance lapses, weak capitalisation, and operational inefficiencies.
They note that the P&A model represents a shift from outright liquidation toward continuity-based resolution, allowing viable components of failed institutions to survive under stronger ownership while protecting depositor funds and maintaining confidence in the financial system.
The transition exercise covers banks spread across all geopolitical zones, including Lagos, Anambra, Kaduna, Kano, Ogun, Osun, Benue, Niger, and the Federal Capital Territory, highlighting the nationwide scale of the intervention.
While the NDIC did not release individual performance assessments of the successor institutions, it emphasised that the completion of the legal process is critical to ensuring compliance with statutory provisions and closing all outstanding obligations tied to the failed banks.
Stakeholders expect the conclusion of the exercise to further strengthen regulatory credibility and reinforce ongoing reforms aimed at improving corporate governance, capital adequacy, and risk management practices within Nigeria’s lower-tier banking institutions.
The development is also seen as part of broader financial sector stability efforts led by regulators to reduce systemic risk and enhance confidence in the country’s deposit insurance framework.
NDIC begins final legal steps to wind up 89 failed microfinance and mortgage banks following successful acquisition under the Purchase and Assumption framework approved by the Central Bank of Nigeria, marking a major financial sector resolution milestone.
NDIC moves to conclude liquidation of 89 failed microfinance and mortgage banks after successful P&A transition to new owners approved by the Central Bank of Nigeria, as court dissolution process begins.