The Nigeria Deposit Insurance Corporation has initiated court proceedings to complete the liquidation of 89 defunct Microfinance Banks and Primary Mortgage Banks after their takeover by new investors. The corporation's Head of Communication and Public Affairs, Hawwau Gambo, announced the development in a statement released on Wednesday.
The NDIC's move marks the final stage in winding up operations of the failed institutions, which had previously been placed under regulatory control. The corporation did not disclose the identities of the acquiring entities or the timeline for the court process.
The liquidation affects institutions that had already ceased operations before the acquisition by new owners. The NDIC's role involves ensuring the protection of depositors' interests and the orderly dissolution of the banks' remaining assets and liabilities.
The NDIC's rush to court over 89 dead banks reveals the staggering scale of Nigeria's microfinance sector collapse - nearly a hundred institutions wiped out while regulators watched.
This mass burial of MFBs and PMBs exposes how the Central Bank's licensing spree created a forest of weak institutions that collapsed at the first economic shock. The fact that "new owners" are acquiring these corpses suggests asset stripping rather than genuine revival, with depositors likely to recover pennies on the naira.
For the rural traders, market women and small business owners who patronised these institutions, the liquidation means another round of waiting years for paltry compensation while watching their savings evaporate. The 89 banks represent thousands of lost jobs and vanished retirement funds across communities that can least afford the hit.
This fits Nigeria's depressing pattern of financial sector boom-bust cycles where regulators approve institutions without capital or competence, only to close them after they've wreaked havoc on depositors.
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