(L-R)Fady Khatib, director, HHp Samsung West Africa and Mohammed Jameel, GCOO, Globacom, going through Samsung's new brands at the Samsung/Globacom 50th anniversary offer in Lagos.

SOME microfinance banks whose licences were revoked recently by the Central Bank of Nigeria (CBN) are set to take the CBN as well as the Nigeria Deposit Insurance Corporation (NDIC) to court, BusinessWorld can now reveal. The CBN had revoked the licences of 224 microfinance banks nationwide that it said were ‘terminally distressed’ and ‘technically insolvent’.
A member of the National Association of Microfinance Banks, Lagos State chapter said some microfinance banks in Lagos and some other states in the south west part of the country are instituting a suit in the Federal High Court, Ikeja, Lagos to challenge the revocation of their licences. He said:  “We are not happy with the whole process because it was faulty. We were not given enough time to recapitalise, merge or be bought over by interested investors”.
According to him, the purported takeover of the affected banks by the CBN as well as NDIC is unlawful, unjustifiable and does not conform to any international standard. He said they have filed necessary documents at the court to prove that the revocation was not lawfully carried out by the CBN and that there were abnormalities in the process.
He said that the revocation has done more harm than good as it has triggered panic withdrawals in all microfinance banks nationwide. “The revocation of licences has compounded our problems. It would have been better if CBN did not make the announcement, considering the state of the industry and the sensitivity of every issue affecting the market,” he said.
But Mr. Mathias Omeh, national chairman of National Association Microfinance Banks, said the body has no plans to take the CBN and the NDIC to court over the revocation of the licences of some of their members. He however, said they intend to have a dialogue with the CBN with a view to resolving the matter amicably.                    
Meanwhile, microfinance customers are besieging their respective microfinance banks to claim their deposits, following revocation of licences of the 224 MFBs nationwide.
Investigations show that the total amount of deposits in the revoked microfinance institutions is N18.2 billion, while the total loans was put at N19.6 billion. The shareholders’ funds of the 224 affected microfinance institutions was said to be N6.1 billion.