The Nigeria Deposit Insurance Corporation (NDIC) has begun the final phase of winding down 89 failed microfinance banks and one primary mortgage bank, following their resolution under the Purchase and Assumption (P&A) model.
In a statement released on April 15, the Corporation said the affected institutions have already been taken over by new investors, recapitalised, and are now operating under new identities.
The move comes nearly two years after the Central Bank of Nigeria revoked the licences of 179 microfinance banks and four mortgage banks in May 2023 as part of efforts to clean up the financial system.
NDIC said it is now seeking court approval to formally dissolve the defunct entities. The Corporation plans to approach the Federal High Court to obtain dissolution orders and exit its role as liquidator.
This marks the final stage of a resolution process designed to protect depositors while ensuring uninterrupted banking services.
Under the P&A model, assets and liabilities of the failed banks were transferred to new owners, allowing operations to continue under fresh licences issued by the Central Bank.
The approach helped preserve customer deposits, maintain confidence in the system, and avoid the disruption that typically follows bank failures.
Most of the affected institutions were microfinance banks serving small businesses, low-income earners, and the informal sector, segments critical to financial inclusion.
The resolution also reflects broader regulatory efforts to strengthen the banking sector, with many of the successor institutions adopting more modern, technology-driven banking models.
By concluding the liquidation process, NDIC reinforces confidence in Nigeria’s financial system, demonstrating that failed banks can be resolved without triggering systemic instability.
The development also highlights the effectiveness of the P&A model in balancing depositor protection with financial sector stability, while paving the way for stronger and more resilient institutions.
