Eyowo, the digital bank, has announced the restoration of its Microfinance license by the Central Bank of Nigeria (CBN), as disclosed in a statement shared with tech media outlet Benjamin Dada. The reinstatement, marked by an approval in principle, marks a significant milestone for the financial institution.
In May 2023, the CBN had revoked licenses for 47 microfinance banks, including Eyowo, with reasons such as inactivity, insolvency, failure to submit returns, closure, or cessation of the licensed banking activities for over six months. This action was deemed a violation of the Banks and Other Financial Institutions Act (BOFIA), 2020, and the Revised Regulatory and Supervisory Guidelines for Microfinance Banks in Nigeria.
Eyowo, however, has successfully met the CBN’s requirements, leading to the restoration of its license on an approval-in-principle basis, according to the latest statement from the company. The digital bank underwent internal restructuring and system integration after regaining its license.
Following the license revocation in May 2023, Eyowo faced challenges as its accounts were frozen by the CBN, preventing customers from making transactions or accessing their funds. Despite reassurances from the company regarding the security of customer funds, concerns persisted.
In the recent statement, Eyowo informed customers that, through a partnership with ProvidusBank, access to funds has been restored. Customers are now able to access their funds individually after completing the verification process, a measure implemented for safety, fraud prevention, and regulatory compliance.
This development comes as a resolution to a year-long ordeal for Eyowo, which had initially announced the resumption of financial services using its Payment Solution Service Providers (PSSP) license after the license revocation. Co-CEO Yomi Adedeji expressed the bank’s readiness to continue providing payment services under the CBN-backed PSSP license.
Contrary to these assertions, by June 2024, reports surfaced indicating that Eyowo was shutting down operations, as per an internal mail sent to its staff. The company cited challenges hindering its ability to fulfill obligations and declared its intention to wrap up Softcom and Eyowo as they were known.
Despite denying a shutdown and emphasizing a pivot into “financial connectedness,” Eyowo now seems to have overcome its challenges, regained its license, and reopened access to customer funds. The digital bank asserts that it is on the path to full business recovery after a tumultuous period.