Digital finance hit: OurPass, Casha, Sycamore among 46 MFBs shut down by regulator

Nigeria’s fast-growing fintech industry is facing renewed regulatory scrutiny after the Central Bank of Nigeria (CBN) revoked the licences of 46 microfinance banks, a move that has drawn attention to the growing number of digital finance companies using acquired banking licences to expand their businesses.

Among the affected institutions are fintech-linked lenders such as OurPass Microfinance Bank, Casha Microfinance Bank, Creditville Microfinance Bank and NOW NOW Digital Microfinance Bank. Also caught in the regulatory action was a microfinance bank recently acquired by Sycamore, one of Nigeria’s leading digital financial services companies.

Unlike many of the affected institutions, Sycamore moved quickly to reassure customers that the CBN’s decision does not affect its core operations.

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Babatunde Akin-Moses, the group chief executive officer and co-founder, explained that the revoked licence relates only to a microfinance banking entity the company had recently acquired in Kano State and was still integrating into its operations.

“I want to reassure you that Sycamore’s core operations remain fully active and unaffected. Our app is fully functional, and customers can continue to save, invest, borrow and transact as usual. Most importantly, all customer funds and investments remain safe and secure,” Akin-Moses said.

He stressed that customer deposits and investments remain protected, while the company’s lending, investment and digital finance services continue uninterrupted.

According to him, Sycamore remains committed to “the highest standards of governance, transparency and regulatory compliance,” adding that the company will continue to keep customers and stakeholders informed as developments unfold.

The clarification is significant because only weeks ago Sycamore announced its entry into regulated banking after acquiring a microfinance bank licence, a move designed to allow customers save money directly on its platform while giving the company direct access to Nigeria’s payment infrastructure.

The latest development, however, highlights the growing compliance burden facing fintech firms seeking to evolve into full-service digital banks.

For years, many Nigerian fintech companies have relied on acquiring existing microfinance banks instead of applying for new licences from scratch. The approach offered a faster route into regulated deposit-taking, payments and savings products, allowing fintechs to compete more directly with traditional banks.

The CBN’s latest enforcement action suggests that regulators are now looking beyond ownership changes to examine whether acquired institutions continue to satisfy prudential requirements, maintain adequate capital and remain fully operational.

The development marks a new phase in Nigeria’s fintech evolution, where regulatory discipline may become just as important as technological innovation. Rather than rewarding rapid expansion alone, the market is increasingly placing greater value on governance, risk management and capital strength.

The development could also reshape how fintech companies expand in the future. Instead of relying primarily on acquisitions, firms may now strengthen internal compliance systems before pursuing regulated banking ambitions, while investors are expected to pay closer attention to regulatory readiness when evaluating fintech businesses.

The CBN said the licences were revoked because the affected institutions failed to meet one or more regulatory conditions, including maintaining minimum capital, remaining operational and having sufficient assets to meet liabilities. The regulator said the action forms part of its efforts to protect depositors and strengthen confidence in Nigeria’s financial system.

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For Sycamore, the immediate priority has been preserving customer confidence.

“Our app is fully functional. Customers can continue to save, invest, borrow and transact as usual… We remain committed to the highest standards of governance, transparency and regulatory compliance,” Akin-Moses reiterated.

His response may ultimately become one of the defining messages from the CBN’s latest enforcement exercise. While the revocation has affected dozens of microfinance banks, it has also exposed a broader reality for Nigeria’s digital finance industry: innovation alone is no longer enough.

As fintech companies race to become digital banks, regulators are making it clear that growth must be matched by strong governance, adequate capital and continuous compliance with banking rules.