Moniepoint to acquire commercial banking licence

Africa’s latest unicorn Moniepoint is trying to secure a commercial banking licence from Nigeria’s central bank. If successful, the fintech will become the first Nigerian fintech with a commercial banking licence, allowing it to diversify its offerings, open branches nationwide, and compete with banks like Providus and Globus.

The licence would allow Moniepoint to tap into the high-revenue foreign currency and treasury markets, which earned Nigeria’s top banks over ₦3.37 trillion ($2 billion) in 18 months. It also gives it a boost over competitors like OPay and Kuda, shaking up the fintech playbook in Nigeria. 

But the requirements of a licence are steep. Moniepoint will need to fork out $30 million for the cheapest licence, a regional bank licence which limits its geographical presence. It will also need to open physical branches which come with regulatory requirements like a strong room, loading bay, and banking hall. 

However, the licence would eliminate limitations imposed by its current microfinance bank status, offering a pathway to expand into corporate and investment banking. It would also show investors that the fintech is ready to embrace a more established regulatory framework.

This would come in handy against a regulator that has increased its focus on fintechs and paused account openings for fintechs in April. Moniepoint, like other fintechs, responded with increased compliance hiring but a licence goes a long way to show it means business. 

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Nigerian digital bank Carbon, which also holds a microfinance banking licence, will resume issuing debit cards to its customers in November, after a six-month break. 

In June, Carbon announced to its over 3 million customers that it will stop issuing cards. At the time, we reported on the financial logistics and expenses it would cost to issue physical cards to customers, given that most of these fintechs in Africa typically have to partner with international card scheme giants like Mastercard and Visa.

The processes are often cumbersome; these startups earn in naira, so they typically have to pay partnership and agreement fees with these processors in dollars—losing money in the forex.

Yet, the pause has likely allowed Carbon to restrategise on the details, pick a cost-efficient provider, and overhaul its card delivery system.

“We looked at the flaws in debit card usage in Nigeria and optimised the experience to make it better for customers and businesses.”

Though Carbon declined to name its new card partner, there are speculations that the fintech will opt for local card payments upstart, AfriGo, that is co-owned by the Central Bank and the Nigeria Inter-Bank Settlement System (NIBSS).

In banking, tier-2 bank Stanbic IBTC will also soon start rolling out AfriGo cards.

The fintech startup has stated that it considers cards as a customer retention tactic. As of 2022, 1 in 3 Nigerians above the age of 15 use debit cards, despite the growing adoption of e-payments.

As banks led the introduction of cards, fintechs have likely associated them with trust. Given their limited physical presences to adopt the move-fast DNA fintechs are known for, low-trust Nigerians have still not learned to put all their money into a fintech. Yet, one poser lingers on our minds: what is Carbon’s new play to make its card distribution process cost-efficient?

“When you are the largest bank in Nigeria and one of the largest banks in Africa, where do you go from here?’ Our vision is now global, very, very global.” 

Those were the words of Aigboje Aig-Imoukhuede, Chairman of Access Holdings, the parent company of Nigeria’s biggest bank by assets, during a presentation at the Nigeria Exchange in July.

If you have been following the events of the financial services space, you’d agree that Access Bank is easily the busiest mergers and acquisitions (M&A) machine. Since the start of 2024, the bank has made a string of strategic acquisitions across Africa to achieve its goal of becoming “the world’s most respected African bank.”

Two weeks after Access Bank received a crucial first approval from Kenya’s competition watchdog to acquire tier-2 commercial bank National Bank of Kenya (NBK) from KCB Group, the bank conglomerate has struck another deal in East Africa.

Its UK arm, Access Bank UK has reached an agreement to acquire a majority stake in Mauritius-based Afrasia Bank, the country’s fourth-largest bank. That acquisition helps Access Bank UK expand its personal and corporate banking services to Mauritius which boasts a robust financial services sector. 

The choice of Afrasia Bank is interesting considering its financial position: it holds total assets worth more than $5.7 billion.

Access Bank hopes to leverage Mauritius “as a strategic hub for trade, finance, and regional connectivity” and facilitate cross-border transactions across Africa and beyond.

While its NBK acquisition is still awaiting another approval from the Central Bank of Kenya, one thing is clear: Access Bank is here to stay in East Africa.

Macroeconomic challenges continue to pressure business numbers for companies. 

MTN Group, Africa’s largest indigenous telco operating in 17 countries, reported an 18.5% drop in service revenue for the third quarter of 2024, driven largely by Nigeria’s naira devaluation and operational struggles in Sudan. 

Its total service revenue fell to R127.37 billion ($7 billion) a sharp decline from R156.3 billion ($8.6 billion) in Q3 2023.

Voice revenue dropped by 31.3% while data revenue declined by 15.3% year-on-year.

MTN Nigeria, historically one of the group’s biggest markets, saw its revenue plunge by 48.7% due to currency devaluation. 

However, there were some bright spots for the telco giant. South Africa and Uganda, benefiting from more stable currency conditions, posted modest revenue gains of 3.3% and 5% respectively. 

The telco’s total subscriber base grew by 1.6% to reach 288 million, although regulatory adjustments in Nigeria and conflict-driven declines in Sudan weighed on growth. 

The group’s fintech platform, MoMo, remains a key pillar of the company’s growth strategy, especially as mobile money adoption rises across Africa. MoMo transaction volumes grew to 14.9 billion, accounting for $229.2 billion in value, and bringing in an 8.5% revenue increase for the group.

This week, Agventure Limited, a Kenyan Agritech startup, secured US$9.5million in debt financing from AgDevCo (November 10).

Here are the other deals for the week:

• Teradix, an Egyptian SaaS e-procurement solutions provider, secured a US$140,000 grant from the TAQADAM Accelerator Program at King Abdullah University of Science and Technology (November 12).
• Efreshli, an Egypt-based Interior design startup, raised an undisclosed amount in a seed round led by Algebra Ventures (November 13).

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