Key highlights
- A total of 894 microfinance banks have been licensed by the Central Bank of Nigeria (CBN).
- Some of these banks have morphed into full digital banks leveraging mobile apps to provide financial services.
- These 10 digital banks are among the top licensed microfinance banks bridging the financial inclusion gap in Nigeria.
The digital banking industry has been growing steadily worldwide and Nigeria is no exception. Digital banks are becoming increasingly popular due to their low charges, convenience, and efficient internet-based transactions. They are also known for their technologically adept personnel, who provide exceptional services, making them a threat to traditional brick-and-mortar banks.
Although they may not have as broad an offering as traditional banks, they can provide unique and specific features that can be advantageous for customers.
While these digital banks could be lumped as fintech due to the similarities in their service offerings, they operate under different licence categories issued by the Central Bank of Nigeria (CBN). Within the broad spectrum of companies operating in Nigeria today as fintechs are mobile money operators, Payment Service Banks (PSBs) Finance companies, and Microfinance banks.
Interestingly, most of the popular digital banks delivering financial services in Nigeria through mobile apps are licensed as microfinance banks.
Although the CBN database shows that a total of 894 companies have been licensed as microfinance banks as of February 2023, not all of them are fully digital and not all can be described as digital banks.
Here are 10 of the top full digital banks licensed by the CBN as microfinance banks:
Sofri
Launched in April 2022, Sofri is a digital bank powered by Links Microfinance Bank and licensed by the Central Bank of Nigeria (CBN). It provides a one-stop approach to banking services, offering savings, loans, and investments through its mobile app. Sofri hopes to become a national microfinance bank over time. The app has received positive reviews for its swiftness of transfers and has been offering a raffle draw promo campaign to help Nigerians during the cashless policy era.
Mint
Mint is a virtual bank licensed by the CBN and provided by Finex Microfinance Bank Ltd. It offers a range of services, including current and savings accounts, low-interest loans, and a personalized money tracker. There are no fees for maintenance or transactions when opening a current account, and the savings accounts offer goal-based savings plans that can reward customers with up to 36.5% interest.
Piggyvest
Piggyvest is licensed by the CBN as a microfinance bank and it is insured by Nigeria Deposit Insurance Corporation (NDIC). PiggyVest provides its customers with savings and investment tools. The company offers fixed, flexible, goal-oriented, and automated savings options, as well as pre-vetted low-medium risk primary and secondary investment avenues for 6 – 12 months.
VFD
VFD Microfinance bank is a streamlined digital and mobile banking platform offering individuals and businesses swift, secure, and cutting-edge banking services. The bank is in the business of helping all its customers achieve their desires, solve intermittent problems, and create wealth, through high-yield savings accounts and low-interest rates on loans.
Moniepoint
Formerly known as TeamApt, Moniepoint is also a CBN-licensed microfinance bank delivering financial services digitally. According to the company, Moniepoint was founded with the vision to create a society where everyone experiences financial happiness. The company last year secured a Switch and Processorlicence from the CBN in addition to its Microfinancelicence.
FairMoney
FairMoney is a digital bank focused on lending. The company is also licensed by the CBN as a microfinance bank. It provides instant loans of up to one million naira, as well as a bank account and a debit card. According to the company, FairMoney processes over 10,000 loans every day, with one loan disbursed every eight seconds.
Carbon
Carbon is a CBN-licensed digital bank that also provides a loan facility and investment opportunities, in addition to usual digital banking features such as debit cards. Accounts on the Carbon app are enabled for P2P payments, as well as bill payments and mobile recharges. It is also a microfinance bank.
Kuda
The fintech valued at US$500 million is fully licensed by the Central Bank of Nigeria (CBN) as a microfinance bank. Although Kuda is based in London, it is currently focused on the Nigerian market. Kuda accounts come with a free debit card, budgeting, and spending controls, and transfers and savings functions as well. The bank has also killed maintenance fees and provides users with a specific list of free transfers each month.
Eyowo
Eyowo is a CBN-licensed digital microfinance bank that unifies all the financial tools you need to pay, receive, budget, and save money in one place. The bank is fostering financial inclusion by providing access to financial services to every Nigerian with a phone number.
Sparkle
Sparkle is a digital bank licensed by the CBN under the microfinance category. The company launched in 2019 with a mission to help Nigerians fulfil their potential by democratizing access to valuable solutions for their business and personal needs. The bank prides itself on offering not only banking services but also on improving the financial lifestyle of its customers.
Bottomline: While the list is by no means exhaustive, knowing the status of these banks with regards to licensing gives some level of assurance to customers that their money is safe as the digital baking space is now proliferated with illegal players. Aside from the licence status, when choosing a digital bank to invest in, look out for financial products, digital tools, savings account interest rates, and other key features.
Excellent piece. However, why did this piece give the value of KUDA but failed to do same for the others?
That’s what I was about asking
What of Alat, isn’t it under this category?
Alat is a digital platform app for a commercial bank called WEMA BANK
Alat is owned by WEMA bank so technically it’s a commercial bank with FINTECH expect.
What of Opay?
I’m surprised Opay isn’t on your list.
Me too! 🤔
What of OPAY and PALMPAY
So no opay😏😏
The pices seem not to be complete. You left out the most workable functional effective and efficient Nigeria digital bank out …
1 Palmpay
2. Okay
3.Alat
You have not included one of the best Fintech company.
Nownow digital systems limited.O personally have been using the app for over 3 years with no challenge
Is Opay digital licensed by the CBN?
What about Altbank?
What of Renmoney?
What about EaseMoni?
Upon all the platform apps they’ve mentioned here haven’t seen opay
I always knew OPay isn’t good so why did they say licenced by CBN? So even Palmpay isn’t the list. Why then are they advertising being under CBN.na wa for this country o
What about opay and PALMPAY that show they are scam microfinance bank abi
Opay and Palmpay are also licensed by the CBN and they are digital banks though not Microfinance Banks.