CBN declares Zuldal Microfinance Bank illegal

By Chioma Obinagwam

Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has issued a firm disclaimer against an entity masquerading as “Zuldal Microfinance Bank Limited,” declaring it unlicensed and unauthorized to conduct any banking or microfinance operations in the country.

Confiance News gathered that the announcement, shared via the CBN’s official X account (@cenbank) on November 20, underscores the regulator’s ongoing efforts to combat fraudulent financial institutions amid rising reports of illicit activities in Nigeria’s microfinance sector.

The press release, signed by Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications, highlights that Zuldal Microfinance Bank has been falsely presenting itself as a licensed operator with branches in major cities including Lagos, Abuja, Kaduna, and Kano. “The said Zuldal Microfinance Bank Limited is not a licensed Microfinance Bank and has no authorisation from the Central Bank of Nigeria to operate or carry out any form of banking or microfinance business in Nigeria,” the statement explicitly warns.

Citing Section 2(1) of the Banks and Other Financial Institutions Act (BOFIA) 2020, the CBN emphasized that no entity may engage in banking activities without proper incorporation and a valid license issued by the apex bank. This legal stipulation aims to protect consumers from unregulated operators who could expose depositors and borrowers to significant risks, including loss of funds and identity theft.

The CBN’s alert comes at a time when Nigeria’s financial landscape is increasingly digitized, with over 700 legitimate microfinance banks currently approved by the regulator to serve underserved populations. However, the proliferation of fake institutions has prompted heightened vigilance.

Confiance News learnt of reports that suggest that Zuldal has been aggressively marketing itself as a credible lender; potentially luring unsuspecting customers with promises of accessible loans and savings products. The apex bank urged Nigerians to “disregard any claims of licensing or approval by Zuldal Microfinance Bank Limited and to refrain from engaging in any financial transactions with the said entity,” noting that such dealings are undertaken entirely at the individual’s own risk.

Financial experts have echoed the CBN’s concerns, pointing to a broader trend of unlicensed operators exploiting economic vulnerabilities. “In an era where microfinance is crucial for financial inclusion, verifying credentials is non-negotiable,” said Dr. Aisha Bello, a Lagos-based economist specializing in regulatory compliance. “The CBN’s proactive disclosure is a vital step, but public education on due diligence remains key to curbing these scams.”

To assist the public, the CBN directed individuals to its official website (www.cbn.gov.ng) for a comprehensive list of licensed financial institutions, including microfinance banks. This resource allows users to cross-check any entity’s status before committing funds or personal information. The regulator also reiterated its commitment to maintaining the integrity of Nigeria’s financial system, promising swift action against violators.

Nigerians are advised to report suspicious financial entities to the CBN via its consumer protection channels. In light of this development, financial literacy campaigns may see renewed focus, reminding citizens that true empowerment begins with informed choices.

Please follow and like us: