A Nigerian fintech unicorn, Moniepoint, is in the process of securing a commercial banking license from Nigeria’s central bank. This strategic move is aimed at expanding its retail banking operations and increasing its market share in Nigeria’s financial services sector.
Obtaining a commercial banking license would allow Moniepoint to diversify its product offerings, including international transactions and treasury operations, which are key revenue streams for banks. Additionally, it would enable the fintech to establish physical branches, fostering trust in Nigeria’s banking landscape.
Foreign currency transactions have the potential to significantly boost Moniepoint’s revenue, tapping into a lucrative market that has been profitable for major Nigerian banks. This license would also position Moniepoint ahead of competitors like OPay, making it the first Nigerian fintech with a commercial banking license.
By pursuing a commercial banking license, Moniepoint aims to efficiently distribute financial services compared to its competitors. Despite entering the market later, the fintech has made a mark in the agency banking sector through technology and a wide network of agents.
Moniepoint has been silent on the matter of the license approval process. If successful, the fintech will be a relatively late entrant to the commercial banking sector but hopes to leverage its retail banking momentum to establish a strong presence. Industry experts suggest that Moniepoint’s customer base ranks second only to OPay and surpasses that of Kuda, a significant achievement in a competitive market.
There is potential for disruption in Nigeria’s banking sector, as traditional banks have faced criticism for inadequate services. A fintech-driven commercial bank like Moniepoint could shake up the industry and offer a fresh approach to banking services in the country.
Moniepoint initiated preparations for the license in early 2024, appointing a new Chief Financial Officer and expanding its compliance team. Acquiring the license involves meeting stringent regulatory requirements and capital obligations, which Moniepoint seems prepared to fulfill.
Despite the rigorous standards associated with a commercial banking license, the benefits of diversified services, enhanced credibility, and increased growth opportunities make it a strategic move for Moniepoint as it aims to expand its market presence and offerings.
Note: The article has been updated to correct previous misinformation regarding Nubank’s banking license status in Brazil.