Kuda Microfinance Bank has officially secured a national microfinance banking license from the Central Bank of Nigeria (CBN), a pivotal development enabling its expansion across the country. This upgrade removes previous geographical restrictions, allowing the digital-first bank to establish a physical presence nationwide. The move signals a strategic alignment of Kuda's regulatory status with its growing operational scale while reaffirming its commitment to its core digital banking model.
A New Era of Operational Flexibility
The transition from a Unit Microfinance Bank license marks a significant evolution for Kuda, which was previously limited to physical operations in a single location. The new national license provides the regulatory framework for nationwide expansion, offering greater operational flexibility. This change is primarily about regulatory alignment rather than a fundamental shift from its successful digital-first strategy, which continues to be its primary focus.
Musty Mustapha, MD/CEO of Kuda MFB, emphasized the license's importance, stating it strengthens the bank's relationship with the CBN and affirms its commitment to high compliance standards. He noted that while Kuda remains digital at its core, the license allows for physical touchpoints where customers desire in-person support. This hybrid approach aims to serve Nigerians across the country in the most convenient ways possible for them.
Integrating Physical Touchpoints with Digital Services
With the new mandate, Kuda plans to open additional experience centres, subject to regulatory approval, modeled after its existing facility in Yaba, Lagos. These centres are designed not as traditional branches but as hubs for customer support and community engagement. They will provide a space for customers to interact directly with the Kuda team for assistance and to learn about its services.
It is important to note that this expansion does not alter Kuda's existing product suite, which includes transfers, payments, savings, and instant credit via its app. The national license primarily provides the regulatory backing for a nationwide presence, enhancing accessibility for a broader customer base. This strategy allows Kuda to cater to users who value the option of face-to-face interaction for resolving complex issues.
Stricter Compliance and Capital Requirements
The upgrade to a national license brings Kuda under a more stringent regulatory framework, including increased disclosure requirements. National microfinance banks are mandated to publish their annual accounts in a national daily newspaper, ensuring greater transparency and accountability. This move aligns Kuda with the highest standards of financial reporting and corporate governance within the Nigerian banking sector.
Furthermore, the new status significantly raises the bank's minimum paid-up capital requirement from ₦200 million to ₦5 billion. This development follows a broader trend where the CBN is upgrading licenses for major fintechs like Moniepoint and OPay to match their operational scale. The increased capitalisation and compliance demands test the low-overhead advantage that has defined many digital banking platforms.
Sustained Growth in a Competitive Market
Kuda's strategic move is supported by impressive growth metrics that underscore its significant market impact. In the first quarter of 2025 alone, the fintech processed over 300 million transactions valued at ₦14.3 trillion (~10.0 billion USD) across its retail and business platforms. The bank also issued ₦16.4 billion (~11.5 million USD) in overdrafts during the same period, reflecting a 43% quarterly growth in its credit services.
In conclusion, Kuda Microfinance Bank's acquisition of a national license represents a major milestone in its journey, strategically positioning it for future growth. This development enables the bank to blend its robust digital platform with a network of physical experience centres, enhancing customer service and accessibility. By embracing a hybrid model under a stronger regulatory framework, Kuda is poised to solidify its standing in Nigeria's dynamic fintech landscape.