LAPO MFB, a well-known microfinance bank, has recently issued ₦237 billion in loans and is now gearing up to introduce a new banking app. The aim is to expand its customer base beyond petty traders by appealing to a younger demographic. This move comes after 35 years of specializing in small-ticket loans for low-income earners, as the bank seeks to revamp its image.
Scheduled for launch in early 2025, the LAPO app will offer a range of features such as loan applications starting at ₦20,000, bill payments, daily transactions, expense tracking, and fixed deposit account openings with competitive rates. The bank’s digital banking head, Amechi Koldsweat, emphasized the importance of catering to the changing needs of their clientele, acknowledging that their customers are not limited to just small traders.
With 6 million customers, LAPO MFB is entering Nigeria’s competitive digital banking sector alongside established players like OPay, PalmPay, and Moniepoint. Despite being a newcomer, the bank plans to leverage its extensive physical presence across 34 states, long history of issuing credit, and existing cashback reward programs. This approach aims to complement digital services with traditional in-person interactions, ensuring financial inclusion through physical branches that offer financial literacy programs and community support.
The bank intends to double its loan disbursements in the coming year, using the app to provide faster and improved loan services. Loan amounts will range from ₦20,000 to ₦50 million, with monthly interest rates varying between 2.9% and 3.5%, depending on the customer’s profile. LAPO MFB is cautious about digital lending risks and will start with smaller loans, gradually increasing limits based on borrowers’ repayment history.
By partnering with credit bureaus and utilizing its data for credit assessments, LAPO MFB aims to ensure responsible lending practices. The bank’s strategy of combining its established reputation with digital advancements positions it to cater to its existing customer base while attracting a new generation of clients. This strategic approach is crucial in a competitive landscape where user loyalty and competition from digital fintechs pose challenges.