OPay earns more from lending than payments as profit hits $90.9 million

OPay Limited has reported revenue of $467.06 million in the first half of 2026, up 136.5% from $197.48 million a year earlier, while profit after tax more than quadrupled to $90.87 million from $21.71 million.

Lending supplied the biggest share of that growth. Income from loans issued rose 167.9% to $236.12 million, exceeding the $130.55 million generated from payment-related services and accounting for just over half of total revenue.

For a company widely associated with transfers and digital payments, the figures raise an important question ahead of its proposed US listing and planned Nigerian secondary listing: does earning more from loans make OPay a stronger business, and could it translate into better returns for shareholders?

The results, disclosed in its October 9 registration statement with the US Securities and Exchange Commission, show stronger earnings alongside rising credit costs. Understanding both is essential to assessing whether growth can be sustained.

Lending becomes the main revenue source

Payment income grew strongly, increasing 86.9%. However, lending income expanded faster, widening the gap between the two. Payments contributed 27.9% of total revenue, compared with 50.6% from loans issued by OPay.

The company earns credit income through two models: issuing its own loans in Nigeria and arranging loans funded by other lenders in Indonesia.

• Its Nigerian loans are issued through its licensed microfinance banking subsidiary. OPay earns the lending income but also bears the risk of borrowers failing to repay.
• In Indonesia, third-party lenders provide the funds, while OPay connects them with borrowers and helps service the loans.
• This business generated $41.57 million, contributing another 8.9% of total revenue.

Together, the two businesses supplied 59.5% of OPay’s revenue, with Nigeria accounting for about 85% of combined credit income.

Its growing dependence on lending is therefore largely tied to Nigerian borrowers and their ability to repay.

• New loans issued in Nigeria more than tripled to $927.63 million in H1 2026 from $305.12 million a year earlier.
• Quarterly unique borrowers increased from 3.5 million to 6.7 million.

OPay identifies both as the main reasons lending income rose. Although it acknowledges relatively high interest rates on certain Nigerian credit products, the filing does not establish that an increase in rates drove revenue growth.

Loan volume grew faster than lending income, suggesting that the increase was driven mainly by OPay lending more money to more borrowers.

Its payments platform helps support this expansion. OPay says payment data helps it assess lending risk, allowing it to offer loans through an existing customer network. In turn, credit products encourage customers to stay on the platform and transact more frequently.

This creates opportunities to earn more from each customer, but extending loans also exposes OPay to the risk that some borrowers will not repay.

More loan income, but rising repayment losses

Expected credit-loss expenses increased 210.3% to $118.36 million, growing faster than lending income. These charges reflect money OPay expects it may not recover.

• They absorbed 25.3% of total revenue, compared with 19.3% a year earlier. In simple terms, OPay recognised about $25 in expected credit losses for every $100 earned, up from $19.
• OPay also wrote off $113.15 million in loans it considered uncollectible, a 520.5% increase from a year earlier. The six-month amount exceeded $69.95 million written off throughout 2025.
• Separately, borrowers were late in repaying $113.80 million in outstanding loans and interest at June 30. This represented 27.4% of the $415.33 million owed to OPay more than a quarter of the outstanding balance.
• The overdue share improved from 34.2% as of December 2025. However, the amount overdue increased from $93.71 million; its share fell because the total loan book grew faster.

These delayed payments could still be recovered. The lower overdue percentage is encouraging, but the rising amount awaiting repayment shows why effective collections must accompany lending growth.

OPay said it tightened consumer lending and shifted towards merchant loans it considered lower risk after temporarily increasing loan sizes and repayment periods for certain borrowers.

The next test is whether those changes improve repayment performance as newer loans mature.

Investor perspective

OPay’s $90.87 million profit already reflects the credit-loss expense. Its expanding business therefore earned enough to absorb higher credit costs and still deliver stronger results.

• Revenue also grew faster than total operating expenses, helping operating profit rise to $131.24 million from $35.80 million. That is evidence of improving overall profitability, although it does not establish that lending is more profitable than payments on its own.
• For prospective shareholders, the two activities can complement each other. Payments provide customer reach and transaction data; lending creates another income stream. Payment revenue growth of 86.9% also shows that OPay retains a substantial source of growth alongside credit.
• The concern is that expected credit-loss expenses are growing faster than lending income. If that continues, repayment losses could consume more of the benefit from issuing additional loans.

Earning more from lending is favourable when it leaves lasting profit after funding costs and losses. Better collections would help OPay retain more income without depending solely on rapid lending expansion.

The eventual investment case will depend on whether OPay can sustain those earnings and whether the listing price offers sufficient value for the lending risks investors are taking.