NDIC Begins Payouts to Depositors of 46 Failed Microfinance Banks

The Nigeria Deposit Insurance Corporation (NDIC) has commenced the payment of insured deposits to customers of 46 failed microfinance banks (MFBs) whose operating licences were revoked by the Central Bank of Nigeria (CBN).

The corporation has also stepped up efforts to recover loans owed to the affected institutions and dispose of their assets to raise funds for depositors whose balances exceed the insured limit.

The NDIC Managing Director and Chief Executive Officer, Thompson Sunday, disclosed this on Wednesday in Lagos during a retreat organised for members of the House of Representatives Committee on Insurance and Actuarial Matters.

Speaking on the sidelines of the event, Sunday said the corporation immediately commenced the liquidation process after the CBN revoked the licences of the affected microfinance banks and appointed the NDIC as their provisional liquidator.

“We’ve started paying depositors of those banks, and gradually, we intend to cover all the insured depositors,” he said.

According to him, the NDIC’s responsibility as liquidator includes paying depositors the guaranteed amount, after which the corporation pursues debtors of the failed institutions and sells available assets to generate additional funds for the settlement of uninsured deposits.

“Our function as liquidator involves paying the guaranteed sums. Thereafter, we go after those owing the institutions and ensure that available assets are sold to realise funds for settling the uninsured portions of deposits,” Sunday said.

He explained that the NDIC had significantly improved its reimbursement process through collaboration with the Nigeria Inter-Bank Settlement System (NIBSS), allowing insured deposits to be paid automatically to eligible customers through their Bank Verification Numbers (BVNs).

Under the arrangement, depositors with valid BVN-linked accounts receive their insured funds directly in accounts maintained with other banks without having to submit individual claims, a development aimed at reducing delays in accessing their money.

Sunday said the system had also accelerated the reimbursement of depositors of Heritage Bank, with about 700,000 customers already receiving their insured deposits since the lender’s licence was revoked.

He, however, disclosed that some Heritage Bank depositors remained untraced because the institution had inherited accounts from legacy banks, including Enterprise Bank, Spring Bank and Guardian Express Bank, many of which were opened before the introduction of the BVN system.

“There are depositors that we have not been able to trace, and this is an opportunity for them to come forward. Once they do, we will pay them,” he said.

The NDIC chief added that proceeds from loan recoveries and the sale of assets belonging to failed banks would be used to settle depositors whose balances exceed the insured deposit limit.

On broader developments in the banking sector, Sunday said the recent recapitalisation exercise had strengthened the capacity of banks to support economic growth.

He, however, stressed that increased capital alone was insufficient to guarantee financial stability, noting that it must be complemented by effective regulatory supervision, sound corporate governance and robust risk-management practices.

He said these measures remained essential to protecting depositors and maintaining confidence in Nigeria’s banking system.