The Central Bank of Nigeria’s (CBN) decision to revoke the licences of 46 microfinance banks (MFBs) is creating significant ripple effects beyond the banking industry, with several financial technology (fintech) companies also feeling the impact.
The apex bank explained that the affected institutions lost their licences due to reasons including inadequate assets to meet liabilities, prolonged inactivity, operating without approval, failure to commence business within the required timeframe, and inability to maintain the prescribed minimum capital. The revocation officially took effect on July 1.
The move has disrupted parts of the fintech ecosystem because many fintech companies rely on microfinance banks either as partners for banking infrastructure or through outright ownership of MFB licences to provide financial services.
Among the companies affected is Chipper Cash, which depends on Iwade Microfinance Bank for part of its banking infrastructure used to process customer transactions. Following the licence revocation, many users took to social media to report difficulties accessing the platform. Chipper Cash currently serves more than five million users and processes over 250,000 transactions daily.
Creditville is also affected after acquiring TouchGold Microfinance Bank in 2022 to expand its operations into core banking services. The institution was later rebranded as Creditville Microfinance Bank, which is now among the revoked lenders.
The company said it is engaging with the financial regulator to resolve the issue, while assuring customers that their funds remain safe, secure, and fully accessible. Creditville also reaffirmed its commitment to regulatory compliance and customer protection throughout the process.
Another fintech impacted is Sycamore, which recently acquired and rebranded a microfinance bank as Sycamore Microfinance Bank to secure an MFB licence. However, shortly after the acquisition, the CBN revoked the bank’s licence before the company could fully integrate it into its operations.
The development prompted the company’s management to reassure customers that their funds remain protected because customer deposits are held with commercial banks. The company also explained that the acquired microfinance bank was still undergoing integration into its operational structure when the licence was withdrawn.
Although Sycamore’s investment and loan application has recorded more than 100,000 downloads and facilitated over 500,000 transactions valued at approximately $35 million, the licence revocation has temporarily affected its plans to expand banking services.
The CBN’s action highlights the growing connection between Nigeria’s banking and fintech sectors, with regulatory decisions affecting not only financial institutions but also technology companies that depend on microfinance banks to deliver services to millions of customers.
