NDIC Begins Final Shutdown of Failed Microfinance, Mortgage Banks

The Nigeria Deposit Insurance Corporation (NDIC) has announced plans to proceed with the liquidation and dissolution of several failed microfinance and mortgage banks across Nigeria, following the revocation of their operating licences by the Central Bank of Nigeria.

In a public notice, the NDIC disclosed that it is finalising the winding-up process of dozens of defunct financial institutions and will seek court approval to formally dissolve them and discharge its role as liquidator.

The affected institutions include a large number of microfinance banks and a smaller group of primary mortgage banks whose licences were withdrawn due to regulatory breaches, insolvency, or failure to meet operational requirements.

According to the NDIC, liquidation typically begins after the CBN revokes a bank’s licence. The process involves:

Closing the bank,

Verifying depositors,

Paying insured deposits,

Recovering debts and selling assets to settle outstanding claims.

The corporation emphasized that depositors remain the top priority in the process, with insured funds paid first before creditors and shareholders are considered.

Data From NDIC disclosures show that:

Over 179 microfinance banks and four primary mortgage banks have been affected in recent closures.

In a separate move, the corporation is also working toward the final dissolution of 87 microfinance and mortgage institutions after completing liquidation processes.

Some of the affected mortgage institutions include:

Adamawa Savings & Loans

Kogi Savings and Loans

Resort Savings & Loans

Safetrust Mortgage Bank

The list of microfinance banks spans multiple states, including: Abia, Anambra, Lagos, Kano, Kaduna, and Delta, among others.

The NDIC assured depositors that payments are ongoing for those who have completed verification. Insured deposits are paid up to the statutory limit, while additional balances are settled through liquidation dividends as assets of the failed banks are realised.

However, the agency warned that full recovery of funds; especially uninsured deposits, may take time, as asset disposal and debt recovery processes can span several years.

The NDIC noted that the liquidation of failed banks is part of broader efforts to maintain stability and discipline within Nigeria’s financial system. While the process may temporarily disrupt access to banking services in affected areas, it is intended to protect depositors and reinforce regulatory compliance.