Nigeria: CBN tightens requirements for creating a microfinance bank

The Central Bank of Nigeria (CBN) plays a central role in regulating the largest financial system in sub-Saharan Africa. Microfinance banks (MFBs) play a key role in financial inclusion, particularly in rural areas and among small businesses, in a country where a large portion of the population remains unbanked. The regulator has previously raised the minimum capital thresholds for MFBs to clean up a sector weakened by several bankruptcies. According to Financial Afrik, the CBN has announced stricter conditions for establishing a new microfinance bank in Nigeria. Details of this announcement (regulatory text, exact amounts, schedule) are not accessible in the source dispatch, which is reserved for subscribers, and no official quotes could be verified. For entrepreneurs and investors looking to launch an MFB, this could mean stricter capital, governance, or equity requirements, delaying or increasing the cost of projects. For savers and small business clients, the issue is the stability of a sector regularly shaken by license revocations. This measure is part of a broader trend by the CBN, which has intensified recapitalization campaigns since 2019-2021. It illustrates the classic trade-off between financial stability and inclusion: the open question remains whether it primarily targets new entrants or all existing MFBs.