The latest Nigerian fintech unicorn, Moniepoint, is pursuing a commercial banking license from the Central Bank of Nigeria (CBN) to broaden its retail banking operations and strengthen its foothold in the financial services market.
While the regulatory approval process could take up to a year, securing the license would mark a significant milestone for the nine-year-old fintech.
A commercial banking license would enable Moniepoint to offer a broader range of services, including foreign currency transactions, treasury operations, and international payments—key revenue drivers for traditional banks. The license would also allow Moniepoint to open physical branches across Nigeria, fostering trust in a banking environment where customers have historically shown scepticism toward financial institutions.
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Positioning to disrupt Nigeria’s banking sector
If successful, Moniepoint would become the first Nigerian fintech to obtain a commercial banking license, gaining a competitive edge over rivals like OPay and Kuda. The move mirrors strategies seen in other emerging markets, such as Latin America, where Nubank expanded its operations by applying for a banking license in Mexico after achieving dominance in Brazil.
Despite being a late entrant to the commercial banking space, Moniepoint’s rapid growth in retail banking, launched in August 2023, positions it to compete effectively. Industry experts rank its customer base second to OPay and ahead of Kuda, which reported 7 million users. Moniepoint’s growth trajectory surpasses newer commercial banks like Globus Bank, which had just 60,000 customers as of 2022.
Regulatory challenges and compliance readiness
Moniepoint began preparations for the license in early 2024, hiring Bayo Olujobi as Chief Financial Officer from Stanbic IBTC to bolster its leadership team. It has since expanded its compliance team, adding more than a dozen employees focused on compliance and fraud monitoring to navigate Nigeria’s increasingly stringent regulatory environment for fintechs.
The fintech’s microfinance license limits its offerings to specific regions and basic financial products. A commercial banking license would remove these restrictions, allowing Moniepoint to expand nationwide and provide high-margin corporate banking, foreign exchange transactions, and treasury operations.
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Financial readiness for capital requirements
At $30 million, the capital requirement for a regional commercial banking license is well within Moniepoint’s reach, following its recent $110 million funding round that elevated its valuation to unicorn status. However, meeting additional requirements, including setting up physical branches equipped with strong rooms and banking halls, will be critical to achieving regulatory compliance.
Securing a commercial banking license would enable Moniepoint to compete with Nigeria’s 24 established commercial banks, including market leaders like FirstBank and Zenith. It would also allow the fintech to diversify its revenue streams, increase credibility, and operate within a more structured regulatory framework.
In a market where major banks often prioritize corporate banking over retail, Moniepoint’s fintech-driven approach could reshape Nigeria’s banking sector, offering enhanced services and financial inclusion for underserved populations. If successful, this move would position Moniepoint as a disruptor in Nigeria’s financial services industry, further bridging the gap between traditional banking and fintech innovation.