NDIC moves to wrap up liquidation of 89 failed microfinance, mortgage banks
By Favour Pius
The Nigeria Deposit Insurance Corporation (NDIC) has intensified efforts to conclude the liquidation of 89 failed microfinance and mortgage banks, in a move aimed at strengthening confidence in the financial system and ensuring timely resolution of distressed institutions.
The Corporation said the exercise is part of ongoing measures to sanitise the banking sector, recover assets and settle outstanding claims of depositors and creditors affected by the failures of the institutions.
Industry sources said the affected entities comprise primarily microfinance banks and primary mortgage institutions whose licences had been revoked by the Central Bank of Nigeria (CBN) over insolvency and regulatory breaches.
NDIC noted that significant progress has been made in the liquidation process, including asset realisation, debt recovery and payment of insured deposits, adding that efforts are now focused on concluding outstanding obligations and closing the estates of the defunct banks.
Managing Director/Chief Executive of NDIC, Bello Hassan, said the Corporation remains committed to protecting depositors and maintaining stability in the financial system.
“Our goal is to ensure that all eligible depositors are reimbursed promptly, while also maximising recoveries from the assets of the failed institutions,” he said.
He explained that the liquidation process involves verifying claims, disposing of assets and distributing proceeds to creditors in accordance with established legal and regulatory frameworks.
Analysts said the move underscores NDIC’s critical role in safeguarding depositors and promoting financial system stability, particularly in the microfinance segment, which serves a large portion of low-income earners and small businesses.
They, however, noted that delays in liquidation processes have historically raised concerns among depositors, stressing the need for faster resolution mechanisms and improved asset recovery strategies.
A banking analyst, Bismarck Rewane, said timely closure of failed institutions is essential to sustaining public confidence.
“Prolonged liquidation processes can weaken trust in the system. Accelerating resolution and ensuring transparency will go a long way in reinforcing confidence among depositors,” he said.
The development comes amid broader regulatory efforts to strengthen supervision of microfinance and mortgage banks, many of which face challenges related to weak capitalisation, poor risk management and governance issues.
Stakeholders also called for stronger oversight, capacity building and stricter enforcement of prudential guidelines to reduce the incidence of bank failures in the subsector.
Despite the challenges, NDIC expressed optimism that the conclusion of the liquidation process will enhance financial stability, improve depositor protection and support the overall health of Nigeria’s banking industry.
