MFB acquisitions could leave fintechs with costly regulatory baggage—Sycamore founder

Fintech companies looking to expand into deposit-taking through microfinance bank acquisitions need to look beyond the licence and commercial opportunity, as the transaction can also bring a history of regulatory, governance and operational obligations.

Babatunde Akin-Moses, founder of Nigerian fintech Sycamore, made the point in a recent chat with Nairametrics.

He explained that Sycamore’s experience expanding into deposit-taking through an acquired microfinance bank reinforced the need for deeper due diligence when fintechs pursue acquisitions in the regulated financial sector.

What Akin-Moses is saying

Akin-Moses said acquiring a regulated institution means taking on its regulatory history, governance obligations, operational processes and other responsibilities, beyond its technology, customers or licence.

• “Acquiring a regulated institution is fundamentally different from acquiring a normal company. You are not simply acquiring technology, customers or a licence. You are inheriting a regulatory history, governance obligations, operational processes and a whole set of responsibilities that require very careful due diligence,” he said.

Akin-Moses said the experience reinforced his longstanding view that regulation should be treated as part of the business rather than something to address after building the company.

• “Regulation is not something you deal with after building the business. Regulation is part of the business,” he noted.

He said prospective buyers should not focus only on the licence or commercial opportunity when assessing a regulated institution.

• “For anyone considering an acquisition of a regulated institution, I would say don’t look only at the licence or the commercial opportunity,” he said.

Akin-Moses also advised prospective buyers to ensure that the regulator is appropriately carried along in the process.

CBN tightens scrutiny of MFBs

Akin-Moses’ comments come against the backdrop of increased regulatory enforcement in Nigeria’s microfinance banking sector.

• On July 1, 2026, the Central Bank of Nigeria (CBN) revoked the operating licences of 46 microfinance banks, including Sycamore MFB, with the action taking effect immediately.
• The CBN said the revocations followed failures to meet regulatory requirements, citing grounds including insufficient assets to meet liabilities, closure without approval, inactivity and cessation of financial intermediation, failure to commence operations within 12 months of licence approval, and failure to maintain the required minimum capital unimpaired by losses.
• Sycamore later clarified that the affected licence belonged to a Kano-based microfinance bank it had recently acquired as part of its plans to expand into deposit-taking and payments, and that the revocation did not affect its existing lending and investment businesses.

Akin-Moses told Nairametrics that the CBN’s actions across the microfinance banking sector also show the growing importance of regulatory compliance and institutional soundness as Nigeria’s financial system matures.

• “Nigeria needs bigger and stronger financial institutions to grow a bigger economy,” he said.

Akin-Moses did not attribute Sycamore MFB’s licence revocation to any specific factor.

Get up to speed

Nigerian fintechs have increasingly moved beyond payments and lending to acquire or establish regulated financial institutions as they seek greater control over the financial services they provide.

• The trend was already visible in November 2022, when SME-focused fintech Payhippo acquired Maritime Microfinance Bank, a deal that was expected to give the fintech access to the Nigerian Interbank Settlement System and enable it to accept deposits from customers. The transaction was subject to approval from the Central Bank of Nigeria (CBN).
• In April 2025, C-One Ventures acquired Bankly, a Nigerian fintech that also operated a licensed microfinance bank. The acquisition included Bankly’s licence, platform and team, with C-One moving to integrate the business into its broader financial-services portfolio.
• The push continued in January 2026 when Paystack entered the banking space through the acquisition of Ladder Microfinance Bank. The fintech subsequently launched Paystack Microfinance Bank as a separate entity with its own licence, governance structure and product roadmap.

The expansion has taken place alongside a more active regulatory environment for MFBs.

In January 2026, the CBN upgraded selected fintech and MFB licence holders with nationwide operations to national status, including Moniepoint MFB, OPay and Kuda, while stressing that institutions must meet regulatory benchmarks to qualify.

By July, the regulator had revoked the licences of 46 MFBs over regulatory and operational deficiencies.

What you should know

Nigeria’s fintech sector continues to attract the largest share of startup investment, even as the funding environment becomes more selective and investors place greater emphasis on sustainable growth.

Nigerian startups raised $184.7 million across 51 deals in the first half of 2026, with fintech accounting for $98.5 million across 21 deals, or more than half of total startup funding during the period.

However, total funding increased only modestly from $178.3 million in the first half of 2025, while the number of deals fell from 63 to 51.