Nigerian fintech Moniepoint is pursuing a commercial banking licence to expand its role in the nation’s banking sector, as revealed by sources familiar with the matter.
Per reports, while obtaining regulatory approval could extend over a year, the move reveals Moniepoint’s goal of evolving from its current microfinance status to a fully-fledged commercial bank, ultimately redefining Nigeria’s financial services sector.
Securing a commercial banking licence would open new revenue streams for Moniepoint, including foreign currency transactions and treasury management—two areas known for driving stable income in the banking industry.
Again, the licence would enable Moniepoint to establish physical branches across the country, potentially increasing consumer trust in an environment often filled with low confidence in financial institutions.
Currently, the demand for more accessible and efficient banking services is on the rise and Moniepoint’s goal aligns with this.
The ability to handle foreign transactions could be a financial game-changer for Moniepoint, tapping into a segment that contributed trillions in revenue for Nigeria’s largest banks within the past year.
Such a licence would make Moniepoint a competitor not just to fintech companies like OPay but also to long-established commercial banks, as it would become the first Nigerian fintech to achieve this status.
The strategy is similar to the approach taken by Latin American fintech giant Nubank, which pursued a banking licence in Mexico after achieving growth in Brazil.
The licence would allow Moniepoint to move beyond the constraints of its microfinance designation, which limits its operations primarily to Nigeria’s South-West and restricts certain high-value banking services.
By contrast, a commercial banking licence would enable Moniepoint to offer services traditionally limited to commercial banks, including corporate banking and sophisticated investment solutions.
This shift could disrupt the market, especially as many of Nigeria’s leading banks have been criticised for inadequacies in service delivery to their vast customer bases.
Moniepoint’s move to secure the licence began in early 2024, soon after appointing Bayo Olujobi, formerly of Stanbic IBTC, as its Chief Financial Officer.
The fintech has since ramped up its compliance strategy, adding multiple roles in compliance and fraud prevention—a necessary step to align with Nigeria’s increasingly tough fintech regulations.
This compliance focus also reflects the Central Bank of Nigeria’s deepened watch of fintech operations since late 2023, which has led to challenges for many startups in the sector.
In addition to the regulatory issues, Moniepoint must also meet financial and infrastructure requirements to qualify as a commercial bank.
With an estimated $30 million needed for the minimum capital requirement for a regional licence, Moniepoint’s recent $110 million funding round ascertains its preparedness to meet these demands.
Physical branches must also be established, built with facilities such as strong rooms and loading bays, to comply with regulatory standards.
The transition to commercial banking, however, brings advantages that align well with Moniepoint’s growth initiatives.
Diversifying its product offerings could solidify its presence in Nigeria’s crowded fintech space and also boost its credibility in the eyes of consumers and regulators.
Added to this, as commercial banks typically earn higher profits from corporate clients than retail, Moniepoint would be better positioned to compete in this space, potentially attracting more corporate accounts.
Moniepoint’s journey, though late to the commercial banking space with 24 established commercial banks already operating, shows the company’s strategy of using technology to disrupt traditional banking.
Leveraging its existing agent network and digital platforms has enabled Moniepoint to make success in agency banking and retail services, a foundation it aims to build upon if granted the licence.
In a sector primed for disruption, Moniepoint’s potential entry into commercial banking could cause a competitive shift, challenging both established players and rival fintech firms.
It could redefine the relationship between technology-driven solutions and traditional banking in Nigeria, offering consumers more options in a dynamic financial environment.
