Nigeria's central bank has pulled the licences of 46 microfinance banks in one of the biggest regulatory sweeps the sector has seen in years β and five of the banks caught in the net are owned by fintech startups.
The Central Bank of Nigeria (CBN) confirmed the revocations took effect on July 1, 2025, covering institutions that had either let their assets fall below what they owed depositors, gone dormant without regulatory approval, or simply never opened for business after receiving a licence. CBN Governor Olayemi Cardoso signed off on the order under the Banks and Other Financial Institutions Act.
The five fintech-affiliated lenders named in the action are Sycamore, NowNow Digital, OurPass, Creditville, and Casha. Their inclusion immediately rattled Nigeria's startup ecosystem, where buying an existing microfinance bank has become a popular shortcut for digital lenders looking to move into full-service banking and payments without going through a fresh licensing process.
Sycamore Distances Itself From the Fallout
Sycamore drew the sharpest attention. The company was quick to clarify that the revoked licence belonged to a microfinance bank it had acquired β and that the compliance failures predate its ownership of that entity.
"Sycamore's core operations remain fully active and unaffected," said Babatunde Akin-Moses, Chief Executive of Sycamore.
The company insists its primary business runs on a separate, intact licence. But the revocation still throws a shadow over Sycamore's publicly stated ambition β shared with TechCabal just two months ago β to build a deposit base exceeding β¦40 billion (roughly $29 million) before the end of the year. That target now looks considerably harder to hit.
A Sweep That Was Building for Months
The July 1 revocations were not the first sign that the CBN was tightening its grip. A 47th lender, Goldfish Microfinance Bank, had its licence suspended back in May β a move the CBN only publicly disclosed on June 30, the day before the larger action took effect.
The crackdown also follows the recent recapitalisation exercise that reshaped Nigeria's commercial banking sector. Cardoso's CBN appears to be extending that tougher regulatory posture down the chain to the smaller institutions that underpin much of Nigeria's digital finance infrastructure.
For customers who banked with the affected institutions, the Nigeria Deposit Insurance Corporation (NDIC) is expected to step in to handle deposit claims.
What It Means for Fintech Expansion Plans
The broader concern among observers is what this signals for startups that have spent real money acquiring microfinance bank licences as a pathway into banking. That strategy now carries obvious regulatory risk β especially if the acquired institution had legacy compliance problems the new owner did not fully account for.
Nigeria's fintech sector has long seen microfinance banking licences as faster and cheaper than building a deposit-taking institution from scratch. The CBN's sweep suggests that shortcut comes with strings β and that regulators are now pulling them.
Governor Cardoso has not publicly commented on the specific fintech firms affected, but the action makes clear that the CBN's tighter supervision of Nigeria's financial system is not stopping at the big commercial banks.