CSOs rejects revocation of 13 microfinance bank licenses in Kano

Civil Society Organizations, CSOs, under the aegis of African Centre for Civil Rights, Social Justice and Good Governance, Kano has rejected revocation of licences of 13 microfinance banks, MFBs, in the state by Central Bank of Nigeria, CBN.

BizPoint reports that the 13 banks have been affected by the recent revocation of 46 microfinance banks across the country by the CBN.

But the centre, in collaboration with seven other concerned forum of civil societies, expressed deep concen ove the decision of the apex bank.

In a statement jointly signed by Comrade Bashir Shehu, Executive Director, African Centre for Civil Rights, Social Justice and Good Governance and Hajiya Lami Adamu Garba, Centre for Women Development Initiative, Katsina, the groups noted that of the 46 revoked licenses nationwide, “Kano State has been disproportionately affected, with 13 of its institutions impacted”.

They pointed out that the sudden revocation of 13 licenses in Kano represents a massive blow to the region’s financial architecture, owing to the fact that the state initially hosted ” 40 of such licensed institutions”.

The development, according to them, is particularly alarming as it strikes at a region already struggling with financial access.

They noted that many of the affected banks were situated in Local Government Areas where residents have little to no access to formal financial institutions and often lack basic financial literacy.

The CSOs lamented that the closure of those branches “effectively cripples an already underserved zone, leaving thousands of low-income earners, rural dwellers, and small-scale entrepreneurs without viable banking options.

“While the Centre acknowledges the CBN’s mandate to maintain financial stability and ensure regulatory compliance, we believe such actions must be balanced against their severe socio-economic impact.

“The ripple effects include: erosion of Public Confidence: A significant decline in trust within the microfinance sector. Economic Hardship: Financial distress for vulnerable depositors and small business owners.

“Increased Exclusion: A direct setback to national poverty reduction objectives, particularly in rural areas that now face greater reliance on informal money lenders with predatory interest rates. Stifled Growth: The collapse of rural businesses and industries, which are already struggling under current security challenges,” the CSOs highlighted.

In the light of the development, the CSOs called on the CBN, the State Government, Legislators, and industry stakeholders to urgently review the impact of the revocations on the Kano region.

They advocated for immediate protective measures to ensure all affected depositors in Kano receive swift and transparent reimbursement through the Nigeria Deposit Insurance Corporation (NDIC).

They also called on the Kano State Government to engage with regulators to promote financial literacy and support the rehabilitation or strengthening of viable microfinance institutions.

They also advocated for policies that support, rather than cripple, the financial backbone of rural communities.