Berkeley Legal | Application for a Microfinance Bank Licence
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29 Jan Application for a Microfinance Bank Licence


The Microfinance banking sector has experienced a lot of changes in recent times. In the span of two years (2018 -2020), the Central Bank of Nigeria has increased the minimum capital requirement for a Microfinance Bank (‘MFB’) licence twice. One of the reasons for renewed activity in this space, is the activities of Fintech companies who have taken advantage of MFB licences due to their digital nature and the lack of regulations in the digital and financial technology sector in Nigeria. This has led to an increase in the application for MFB licence by such companies.

In order to apply for an MFB licence the following steps are required:

Reservation of Name and Preparation of Memorandum and Articles of Association (MEMART)

Prior to incorporation and applying for the licence, the proposed name of the company should be reserved at the Corporate Affairs Commission (CAC). The promoters of the MFB should also prepare the draft MEMART as they are required when applying for approval in principle.

Requirements for Pre-licensing Presentation

Promoters and investors are required to make a pre-licensing presentation on the business case of the proposed MFB to Central Bank of Nigeria before a formal application for licence. This also applies to a situation where an investor is acquiring an existing MFB.

Requirements for grant of Approval-in-Principle (AIP)

The promoters of the MFBs are required to submit a formal application for the grant of licence addressed to the Governor of the Central Bank of Nigeria. The application will be accompanied with relevant documents which evidence the genuineness of the application.

At this stage the minimum capital of the MFB will be paid in addition to the application fee to Central Bank of Nigeria and it shall be returned to the MFB upon the application being granted or otherwise.

If the application is successful, CBN will issue an Approval-In-Principle (AIP) to the applicant. The proposed MFB shall not incorporate/register its name with CAC until an AIP has been obtained from CBN in writing and a copy presented to CAC for registration. If the AIP is granted, the applicant can go forward with incorporation of the MFB whose name was earlier reserved.

Requirement for Granting Final License.

After the incorporation of the company, the promoters of the MFB not more than 6 months from the grant of the AIP will apply for a grant of final licence to the CBN, addressed to the Governor of the CBN. The application, along with other relevant documents should be accompanied with evidence of payment of the non-refundable licensing fee to the Central Bank of Nigeria.

Pre-licencing Inspection, Commencement of Operations and Post-Commencement Requirements

As a requirement for grant of final licence, the CBN will conduct an inspection of the premises and facilities of the proposed MFB to ensure it is up to standard. After inspection, the CBN will inform the proposed MFB in writing on their readiness to commence operations. The MFB will also be required to comply with the post-commencement requirements provided in the MFB guidelines.


As technology in the world continues to develop through innovation, the way we manage our finances will continue to change. Therefore, it increasingly important for firms already in the MFB sector or wanting to enter the sector to keep up with these changes.


Berkeley Legal advises on incorporation of financial institutions and provide regulatory advice to enable our clients make informed business decisions and to obtain the requisite MFB licence.

The information provided in this article is for general informational purposes only and does not constitute legal advice. If you require specific legal advice on any of the matters covered in this article please contact