👨🏿🚀TechCabal Daily – M-KOPA wins trademark case
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning Let’s dive right in. M-KOPA wins trademark case against former agent Lemfi acquires Irish company Bureau Buttercrane Kenyan banks lower lending rates World Wide Web 3 Events Companies M-KOPA wins trademark case against former agent GIF Source: Netflix M-KOPA, a Kenyan asset financing company, has won a trademark case against a former agent who copied its brand identity. The High Court ruled on January 23 that John Waweru Njenga’s business, “MKopo Kastomer Care and Accessories,” had violated M-KOPA’s trademark rights. The case, initially filed in August 2023, centred on Njenga’s deliberate use of a nearly identical name and logo to M-KOPA’s, which the court determined could easily mislead consumers into believing the two businesses were affiliated, thus helping “MKopo” to siphon off customers and revenue pipeline from M-KOPA. Here’s Adonijah Ndege reporting for TechCabal: “In M-KOPA’s case, the company’s legal battle was costly but necessary to protect its reputation. Court filings showed that Njenga’s business was riding on M-KOPA’s success, leveraging its established brand to drive sales of phones and accessories.” This case exposes a common problem in Kenya’s informal markets, where businesses often copy established brands to attract customers. Poor enforcement of intellectual property (IP) laws has allowed this practice to continue. However, the M-KOPA case will set a precedent for big brands to follow to protect their business IP. It teaches smaller brands the lesson of both protecting their intellectual property and conducting thorough trademark searches before launching new businesses to avoid costly legal battles like this one. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Fintech Lemfi acquires Irish company Bureau Buttercrane for an undisclosed amount Ridwan Olalere and Rian Cochran, co-founders of LemFi. Image Source: LemFi After announcing a $53 million Series B funding round two weeks ago, LemFi, the migrant-focused remittance startup, has acquired Bureau Buttercrane, an Irish remittance company, as it begins its European expansion independently. The acquisition will allow Lemfi to operate across the European Economic Area (EEA) using its Irish licence through a system called passporting, which allows companies to operate across the EEA using a single licence. The acquisition was purely for regulatory cover and is similar to when fintechs in Nigeria buy MFB (Microfinance Bank) licences—they’re not looking for profitability or the technology in the acquired company but for regulatory cover. Lemfi told its customers it could operate in Europe 22 days ago after partnering with Modulr Finance, a Dutch company. But, CEO Ridwan Olalere told TechCabal that his startup partnered with Modulr while pushing for approval from the Central Bank of Ireland. That approval came quickly because Lemfi had “the right team and followed the correct processes.” Its previous acquisition of RightCard in 2021 made the Change in Control (CIC) process with Ireland’s Central Bank “straightforward.” Operating in multiple markets is necessary for remittance startups to grow as they serve more corridors (US to India, Europe to Africa) and increase their revenue base. More corridors mean a broader and stickier user base, as customers will likely remain loyal if they see the company as a one-stop solution for sending money to different places. Lemfi’s growth in the past year when it grew from $2 billion processed in 2023 to over $10 billion in 2024 was attributed to its expansion into Asia in 2024. The company also doubled users, revenue, and transactions over the past two years. Now, it will look at Europe’s $64 billion remittance market as the next market to drive its growth. With the deal completed, Lemfi plans to make Dublin its European headquarters, hire local staff, and deepen its relationship with regulators as part of its long-term strategy. Banking 23 Kenyan banks lower their lending rates GIF source: Tenor Twenty-three Kenyan banks have lowered their interest rates for the first time in six months since the Central Bank of Kenya (CBK) started easing benchmark rates. While lending rates have declined slightly, the shift has been uneven, with some banks reducing rates while others remain cautious. Fourteen banks opted to hike their lending rates despite CBK’s plea for a downward adjustment. Only Equity Bank, Kenya’s second-largest commercial bank, retained its November 2024 rates. Banks have been wary of the persistently high rate of non-performing loans (NPLs) which remained at 16.5% in October 2024, accelerating from 14.8% on a year-on-year basis. The surging NPL ratio points to the ongoing challenges in loan repayment among borrowers. This has made lenders hesitant to lower rates too aggressively, as they must balance CBK’s policy direction with staying solvent. By June 2024, customer deposits at commercial banks were down 7.4%—likely due to economic challenges—forcing banks to charge higher interest rates to cover the risk of bad loans and lower profits. However, following the CBK’s plea for a downward adjustment of their lending rates, Kenyan banks, through the Kenya Bankers Association (KBA) in December, said lending rates would drop “progressively” because banks depend on customer deposits to issue loans. With 23 of its 43 member banks now on board, the adjustment could ease borrowing costs. But only one bank—Access Bank Kenya—offers a rate below 15% (11.46%), while the average remains high at an average of 16.89% even after the adjustment. During the last Monetary Policy Committee (MPC) committee, the CBK eased the benchmark rate by 75 basis points from 12% to 11.25% in December 2024. With another CBK policy meeting set for February 8, 2025, banks will likely continue adjusting their rates cautiously, keeping a close eye on economic stability and loan performance in the coming months. Never miss an update from Paystack Subscribe to Paystack for a curated dose of product updates, insights, event invites and more. 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Read MoreUber-backed Moove acquires Brazil’s Kovi to continue global expansion
Moove, the Uber-backed Nigerian mobility fintech startup, has acquired Kovi, a car rental startup in Brazil, Latin America’s largest ride-hailing market. The acquisition continues the global expansion of the startup which currently operates in 19 cities across 5 continents. The acquisition is an all-stock transaction that makes Kovi’s investors shareholders in Moove. Kovi has raised over $145 million from investors including Accel, Spectra Investments, Valor Capital, Prosus Ventures, and Quona Capital. Kovi’s investors will now own shares in Moove which has raised about $500 million in debt and equity from investors like Uber, Mubadala, BlackRock, Franklin Templeton, Janus Henderson, and the International Finance Corporation (IFC). An Uber-led Series B where it raised $100 million, valued Moove at $750 million. The acquisition is also important for Moove’s AI mobility strategy which will span the entire business, from optimizing its ride-hailing services to improving fleet management Kovi’s proprietary technology and algorithms will “complement and strengthen our existing move AI mobility strategy and ensure that we can start to deliver an improved service and product to our customers around the world,” Moove’s co-founder and co-CEO Ladi Delano said. This deal increases Moove’s annual revenue to $275 million. It also continues Moove’s expansion outside Africa. The company already operates in Colombia and Mexico, and the acquisition of Kovi will further solidify its presence in Latin America. Moove’s fleet has grown to 36,000 cars operating in 19 cities across six continents, and the company aims to build the world’s largest ride-share fleet outside of Africa. “Their purpose-driven approach is a perfect match to our culture. Together, I believe we will become a truly global category-defining business and will leverage scale and deep expertise never seen in our market,” said Kovi CEO Adhemar Milani Neto.
Read MoreNigeria telecom operators lost $11.3 billion over 11-year tariff delay
The Nigerian telecom operators are reeling from significant financial losses, with projections estimating a staggering $11.3 billion in revenue erosion between 2022 and 2026. This follows an 11-year delay in approving a much-needed tariff increase, according to an in-house report conducted by MTN Nigeria and obtained by TechCabal. The primary cause of this financial hemorrhage is the devaluation of the naira, which, coupled with prolonged regulatory inaction by the Nigerian Communications Commission (NCC), placed immense pressure on telecom operators’ ability to sustain operations. Industry executives, including MTN Nigeria’s CEO Karl Toriola and Airtel Nigeria’s CEO Dinesh Balsingh, claimed the delay pushed the telecom sector to the brink of collapse. With soaring operational costs, the telcos claimed their financial positions were unsustainable. “The price increase which was highly needed for the survival and continued growth of the industry, will enable us to continue investing in network infrastructure, expanding coverage, and delivering improved products and services that meet the evolving needs of our customers,” Balsingh said. A tariff adjustment became inevitable following naira devaluation in 2022 and liquidity problems which often forced players to resort to the parallel market. By 2023, the exchange rate had slipped to $1 to ₦900, further driving costs and cutting into profit margins. Telecom operators, who rely on imported equipment, were caught in a vicious cycle of rising costs and plummeting revenues. In 2023, MTN Nigeria reported its first loss since its 2019 IPO, recording a ₦137 billion deficit largely driven by forex losses. Airtel Africa also faced its first-ever loss in Nigeria, with a post-tax loss of $89 million for the financial year ending March 31, 2024. “We were borrowing at 120% to fund our operations, which was unsustainable,” Toriola said during a media conference MTN Nigeria in Lagos on Tuesday. MTN Nigeria had consistently paid dividends to shareholders from 2007 to 2022, but the pressure from the foreign exchange decline made regular payments impossible. Dividends declined from ₦530 billion in 2022 to ₦196.67 billion in 2023. One of the most alarming side effects of the delay was the drop in taxes paid by telecom operators to the government. While taxes grew from ₦329 billion in 2023 to ₦428 billion in 2024, they are set to plummet to just ₦29 billion in 2025, a 92% decline. This will significantly impact government revenue. Toriola emphasized that MTN Nigeria had explored alternatives, such as import waivers, to alleviate the financial burden. However, these efforts would not have been sufficient to offset the enormous costs imposed by rising power charges, taxes, and right-of-way fees. “Any relief from waivers would have come at a cost to the government, which would have been irresponsible,” he said. In response to these escalating challenges, telecom operators had initially called for a 40% tariff increase in 2022. However, as the naira continued its downward spiral, the situation worsened, and demands for a 100% hike became urgent. According to the MTN report, the industry’s total revenue plummeted from $7.62 billion in 2022 to $6.87 billion in 2023, and further sank to $3.55 billion in 2024. The long-awaited approval for a tariff increase finally came on January 20, 2025, offering hope for an industry in crisis. With the new tariffs in place, the telecom sector is projected to rebound, with revenues expected to rise to $6.67 billion in 2025 and $8.33 billion in 2026. However, experts warn that the 11-year delay has already caused irreversible damage, with long-term economic consequences for both the telecom industry and the Nigerian economy.
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MTN 5G, and ipNX are Nigeria’s internet speed kings – Ookla’s H2 2024 report
Who offers the fastest mobile internet and fixed broadband in Nigeria? MTN and ipNX lead in Ookla’s report MTN Nigeria delivered the fastest mobile internet speeds while being the top choice for gaming, according to Ookla’s H2 connectivity report, which uses Speedtest intelligence data. Ookla evaluated performance across all mobile and fixed internet service providers (ISP) to determine the best performers using a connectivity score which combines speed, web browsing performance, and video streaming quality. In the second half of 2024, MTN recorded a median 5G download speed of 231.39 Mbps and an upload speed of 17.35 Mbps, making it the go-to network for gamers and video streamers. Airtel was a distant second for mobile internet speed, while Grandmasters of Data Globacom had the lowest speed score to round up the top three. MTN share price jumps 9.87% on news of tariff hike approval On the fixed broadband front, ipNX was the fastest provider, with a median download speed of 37.78 Mbps and an upload speed of 38.50 Mbps, solidifying its reputation as the leader in fixed broadband performance in Nigeria for the second half of 2024. Geographically, Lagos recorded the highest median mobile download speed at 40.26 Mbps, followed by Benin City (23.54 Mbps) and Ibadan (23.03 Mbps). In terms of fixed broadband, Port Harcourt led with a median download speed of 24.04 Mbps, followed closely by Lagos at 23.44 Mbps and Kano at 23.4 Mbps.
Read MoreLemfi completes acquisition of Irish currency exchange Bureau Buttercrane; begins European march
Lemfi, a financial services platform for immigrants operating in 22 countries, has acquired the Irish currency exchange platform Bureau Buttercrane, marking a key step in its European expansion. The deal, which received regulatory approval from the Central Bank of Ireland, enables Lemfi to use its Irish licence to operate across the European Economic Area (EEA), unlocking new growth opportunities. The acquisition is a strategic move to ensure regulatory compliance in Europe post-Brexit. While Lemfi already holds a British license from its 2021 acquisition of RightCard, it couldn’t process European transactions directly. The Irish license allows it to operate in all EEA countries using a system called passporting. ‘Rather than focusing on [Buttercane’s] tech stack or profitability, the acquisition was driven by our need to secure the right regulatory framework for our expansion,” said Ridwan Olalere, Lemfi’s CEO. “We already have the technology; this was a strategic acquisition to ensure smooth and compliant operations across Europe.” The deal comes 21 days after Lemfi told customers it could operate in Europe using a partnership with Dutch company Modulr Finance. “We established that partnership because we wanted to start operating in Europe while pushing for an approval from the Central Bank of Ireland,” Olalere said. That approval came quickly because Lemfi had “the right team and followed the correct processes.” “If another European regulator has already approved you in the past, it works in your favor because it shows credibility,” Olalere said. With the deal completed, Lemfi plans to make Dublin its European headquarters, hire local staff, and deepen its relationship with regulators as part of its long-term strategy. Given its track record in Asia and Africa—Lemfi processes $1 billion in monthly payment volume— the company is positioned to tap into the $64 billion European remittance market. Operating in multiple markets is necessary for growth for remittance startups, yet expansion comes with unique challenges. “Europe is a big, complicated market with different payment methods, rules, and preferences across countries. We’re optimistic about growth, but it’s a challenging landscape.” As Lemfi builds its European base, integrating local payment methods will be crucial. “In France, a common payment method is called “Carte Bancaire,” which isn’t Visa or Mastercard. If you enter the French market without supporting this method, you’re missing out on a significant user base,” Olalere said. Nevertheless, Lemfi remains optimistic, drawing on the lessons from its successful Asian expansion. Buoyed by a recent $53 million Series B raise and strong investor confidence, Lemfi is carving out space in the competitive remittance market and positioning itself to challenge competitors head-on. For remittance startups, operating in multiple markets is necessary for growth, as serving more corridors (US to India, Europe to Africa), increases its revenue base. More corridors mean a broader and stickier user base as customers are likely to remain loyal if they see the company as a one-stop solution for sending money to different places. Lemfi raises $53 million Series B round, acquires European firm
Read MoreM-KOPA wins trademark case against former agent imitating its name and logo
M-KOPA, a leading Kenyan asset financing startup, has won a landmark trademark case against a former agent who registered a business with a strikingly similar name and logo. The agent, John Waweru Njenga, operated MKopo Kastomer Care and Accessories, a phone and accessories business that copied M-KOPA’s branding to capitalise on its established market presence. The suit, filed by M-KOPA in August 2023, highlights a worrying trend in Kenya where smaller companies adopt names and logos similar to well-known brands to attract unsuspecting customers. On January 23, High Court Judge Peter Mulwa ruled in favor of M-KOPA, determining that Njenga’s business had infringed on its trademark and caused brand dilution by misleading consumers into thinking the two companies were affiliated. In his ruling, Judge Mulwa pointed out that the names “MKopo Kastomer Care and Accessories” and “M-Kopa Kenya Limited” were so similar that the average customer could easily confuse the two. This confusion could lead consumers to mistakenly believe the two businesses were connected or partners. “Having considered the names MKopo Kastomer Care and Accessories and M-Kopa Kenya Limited, I note a striking similarity between them. In my view, the average customer may not immediately discern the difference between the two and may, therefore, believe that both represent the same product or service,” Judge Mulwa stated in his judgment. The court also found that MKopo Kastomer Care and Accessories had used M-KOPA’s logo to advertise its products and services, further violating trademark laws. Trademark and copyright violations have long been an issue in Kenya’s informal markets, especially in urban areas like Nairobi. Poor enforcement of intellectual property laws allows unscrupulous traders to imitate the identities of successful companies, misleading customers and benefiting from the hard-earned trust that these brands have built. In M-KOPA’s case, the company’s legal battle was costly but necessary to protect its reputation. Court filings showed that Njenga’s business was riding on M-KOPA’s success, leveraging its established brand to drive sales of phones and accessories. Judge Mulwa’s ruling highlights the need for stronger intellectual property protections in Kenya. While trademark infringement cases are common, the lack of strict enforcement and prolonged court cases often allow these infringements to continue unchecked, undermining the ability of businesses to protect their trademarks and, ultimately, their revenue. “These acts constitute trademark infringement, as they confuse the plaintiff’s customers and undermine its exclusive rights to its mark. It dilutes the distinctiveness of the plaintiff’s brand and misleads the public into believing that the defendant’s business is affiliated or authorised by the plaintiff,” Judge Mulwa ruled.
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👨🏿🚀TechCabal Daily – Debit first, questions later
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning We’ve got something for our readers in Lagos, Nigeria. If you love talking about money or have thoughts about personal finance content, we want to hear from you! Our sister publication, Zikoko, is hosting an open and honest conversation about all things money-related, including feedback on their content. As a thank you for your time, you’ll receive a food voucher after the session. Just fill out this form and we’ll reach out to schedule a chat! CBN’s new fraud policy: debit first, questions later M-Pesa faces an old friend Zenith Bank increases staff salaries by 20% Nigeria hopes to subsidise electricity tariffs with new $15 billion pitch World Wide Web 3 Events Regulation CBN’s new fraud policy? Debit the banks first, ask questions later Image Source: YungNollywood In a move that might have some bankers sweating, the Central Bank of Nigeria (CBN) has issued a strong message: banks and fintechs are now directly responsible for fraudulent transactions that slip through their systems. The regulator has directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit bank settlement accounts for any fraudulent funds received, burdening financial institutions with the responsibility to tighten their fraud prevention measures. This tough-love approach stems from the CBN’s growing concern over rising fraud rates in Nigeria’s financial services sector. Nigerian banks lost ₦42.6 billion ($27.7 million) to fraud in Q2 2024, highlighting the urgent need for stronger safeguards. The CBN has been increasingly scrutinising fintechs for compliance issues since early 2024, and this new directive suggests that the regulator is taking no chances. While the new policy is still taking shape, it’s clear that banks will improve their Know Your Customer (KYC) processes and fraud detection systems. As one banker told me, “If a bank allows a fraudulent transaction to pass through its system, it has to bear the consequences.” In December 2024 when a major bank lost ₦7 billion ($4.5 million) to fraud, NIBSS debited the settlement accounts of the fintech that received some of the proceeds of the funds without explanation, according to people close to the matter. The banking sector is bracing for the impact of this new policy, with some banks already implementing stricter controls on transactions. While the jury is still out on the industry-wide response to this move, one thing is clear: tightening accountability is a critical step in fighting fraud. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Fintech M-Pesa has a new an old challenger: Airtel Money Airtel Money MD, Anne Kinuthia Otieno and Naivas Chief of Operations, Peter Mukuha Kenya’s mobile money market, a one-horse race that favoured M-Pesa, is undergoing a dramatic shift. It is now a fiercely contested market, with customers growing increasingly price-sensitive. The operator offering lower prices will capture a larger market share. On Tuesday, TechCabal reported that Airtel Money, Kenya’s second-largest mobile money operator, doubled its market share from 2.9% to 7.6% in just one year, chipping away at M-Pesa’s customer base. Airtel Money’s strategy hinges on affordability, with lower transaction fees and free Airtel-to-Airtel transfers. Airtel Money’s growth strategy is to expand its retail agent network through strategic partnerships while attracting high-value users with higher transaction caps to make bulk transactions on cheaper charges. For example, sending KES 1,000 ($7.7) costs KES 11 ($0.093) on Airtel Money, compared to M-Pesa’s KES 13 ($0.093). Safaricom, M-Pesa’s parent company, now faces pressure on two fronts. Its telecom business is battling fierce competition from satellite internet service provider (ISP) Starlink, while its fintech arm is under siege from Airtel Money’s aggressive growth over the past year. M-Pesa’s advantage lies in its wider utility than Airtel Money. Beyond basic money transfers, M-Pesa offers users the ability to borrow loans through services like M-Shwari and KCB M-Pesa, as well as access insurance products—features that provide added financial flexibility and security. These services create a strong ecosystem that goes beyond simple transactions, making M-Pesa indispensable for millions of Kenyans. Additionally, M-Pesa remains the preferred option for merchant payments due to its acceptance and trust among businesses. However, can this trust sustain M-Pesa in this competitive market? While the industry often pays homage to M-Pesa for pioneering Africa’s fintech evolution, we may be witnessing a case of iterative technology surpassing its predecessor—or simply a battle of business wits. Right now, Airtel Money is winning. Whatever the case, M-Pesa is in a tough spot, and the pressure is mounting for one of Kenya’s biggest businesses. Will it bounce back? Banking Zenith Bank increases staff salaries by 20% GIF source: Tenor Zenith Bank, a Nigerian tier-1 commercial bank, has raised the bar in Nigeria’s banking industry by increasing salaries for nearly 10,000 employees by 20%, effective January 2025. However, it falls short of the 40% salary increase set by GTBank, another tier-1 lender, in September 2024. Aside Zenith Bank and GTBank, Union Bank and Sterling Bank have also raised staff salaries over the past six months, signalling an industry-wide move to address the high cost of living crisis in Nigeria’s inflationary environment (read: strategic move to retain talent.) The rate of job switching in the banking industry is high, as many professionals possess transferable skills that make it easy for them to secure positions quickly at competing banks. For example, banks often hire contract staff for their engineering teams, which makes it easier for these workers to move between institutions. The banks are well aware of this, which is why salary increases are often seen as necessary to retain staff in an environment where skilled professionals are always in demand. However, the question remains: can these salary increases keep pace with Nigeria’s rising inflation and the lure of opportunities elsewhere? How are smaller banks that make less money supposed to compete with the bigger banks with deep pockets
Read MoreAirtel Money eats into M-PESA’s dominance in Kenya, doubling market share to 7.6%
Airtel Kenya’s mobile money service, Airtel Money, grew its market share from 2.9% to 7.6% in the year to September 2024. The growth was fuelled by free Airtel-to-Airtel transfers, lower fees than Safaricom’s M-PESA for sending money across networks, and cheaper withdrawal charges. Over the same period, M-PESA’s market share declined from 97.0% to 92.3%, with Airtel Money steadily eating into its dominance, once reaching 98%, according to the data by industry regulator the Communications Authority of Kenya (CA). With over 40 million mobile money users in Kenya, affordability has become a key factor for Kenyans when choosing how to transact. “Subscriptions to mobile money services increased from 39.8 million to 40.6 million, translating to a penetration rate of 78.9% during the reference period,” the CA said in a statement. In 2020, Airtel Money eliminated charges for Airtel-to-Airtel transfers in an attempt to grow its market share. Sending KES 1,000 ($7.7) to other networks costs KES 11 on Airtel Money, compared to M-PESA’s KES 13 ($0.093), while withdrawing the same amount costs KES 29 ($0.22) on Airtel Money—KES 2 less than M-PESA. Airtel Money has also expanded access points to address past concerns about its limited agent network. In 2024, it partnered with supermarket chain Naivas to increase its agent network. The Central Bank of Kenya (CBK) has pushed for full mobile money interoperability for unrestricted transactions across networks. While progress has been made—customers can send money between networks and make interoperable utility and business payments—agent interoperability remains unrealised, despite CBK’s pledge to implement it by 2024. This missing element, which would allow users to access services at any agent regardless of their provider, keeps the ecosystem incomplete and sustains the dominance of larger players like M-PESA. By September 2024, the overall mobile money agency network had grown to over 365,000 agents, up from 347,700. Airtel Money’s adoption has also been supported by CBK’s 2024 decision to increase the transaction daily limit cap from KES 300,000 ($2322) to KES 500,000 ($3870) to attract high-value customers and businesses. Customers can keep funds received from other wallets for over a week, eliminating the previous requirement to withdraw or have the money sent back to the sender.
Read MoreNigeria’s Central Bank orders NIBSS to debit banks over fraudulent transactions, tightening accountability
To curb fraud in the financial services sector, Nigeria’s Central Bank has directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the settlement accounts of commercial banks that receive fraud proceeds. The directive, effective January 2025, signals a shift towards greater accountability for banks, compelling them to tighten their fraud detection measures. According to multiple sources familiar with the matter, the new rule is part of the CBN’s efforts to hold banks and fintechs accountable for lapses in their transactin monitoring systems. Banks that fail to vet incoming transactions or detect fraudulent activity adequately will face instant debits once that activity is reported. This move is designed to encourage financial institutions to improve their Know Your Customer (KYC) and due diligence—areas the CBN has repeatedly highlighted as critical to safeguarding Nigeria’s financial ecosystem. “What this means is that banks and fintechs are now responsible for the money that comes to them,” said Adedeji Olowe, founder of Lendsqr. “This has always been the foundation of KYC, not just in Nigeria, but in every financial jurisdiction in the world.” The new directive has unofficially been in effect since December 2024 when a major bank lost ₦7 billion to fraud. NIBSS reportedly debited the settlement accounts of the fintech that received some of the proceeds of the funds without explanation, according to two fintech executives familiar with the matter who asked not to be named discussing the regulator’s actions. This comes as the CBN increased its scrutiny of fintechs over compliance issues in early 2024. NIBSS did not respond to a request for comments. The CBN did not respond to a request for comments. “The CBN is holding them [banks and fintechs] accountable this time around. If a bank allows a fraudulent transaction to pass through its system, it has to bear the consequences,” said one banker who asked not to be named due to the sensitive nature of the matter. Nigerian banks lost ₦42.6 billion to fraud in Q2 2024, according to a report by the Financial Institutions Training Centre (FITC). However, most financial institutions avoid reporting fraud incidents for fear of suffering reputational harm in a low-trust market. Only 60 of 163 financial institutions in Nigeria reported fraud cases in 2023, according to a NIBSS report. The new CBN directive is expected to generate significant ripples within Nigeria’s financial sector, with commercial banks likely to respond by implementing more rigorous controls on transactions. At least two commercial banks have tightened their monitoring of large or unusual transactions, according to people familiar with the matter who asked not to be named to speak freely. As the directive takes effect, its impact on reducing fraud in Nigeria’s financial sector will serve as a critical test for the CBN.
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Zenith Bank raises pay by 20% for nearly 10,000 employees to keep in step with tier-1 banks
Zenith Bank has raised the salaries of its nearly 10,000 staff by 20%, effective January 2025, as part of a wider industry trend to retain top talent amid Nigeria’s soaring inflation. The salary increase, confirmed by three employees who asked not to be named discussing a sensitive matter, follows similar moves by GTCO, Union Bank, First Bank, and Sterling Bank over the past six months. “In order to continue to motivate its staff and improve service delivery, Zenith Bank implemented a salary increment of between 20% – 30% involving all staff effective January 2025,” the bank told TechCabal via email. “The Bank also promoted well over 4000 staff on January 17, 2025. This exercise, which is still ongoing, has been described as one that involves the highest number of staff in one promotion in the industry.” With Nigeria’s high headline inflation, commercial banks are under pressure to keep their workforce motivated and prevent talent poaching. Though Nigerian banks employ around 94,000 people, retaining skilled professionals remains a challenge, as job-hopping is often seen as the quickest route to career advancement. Secrecy around salary structures is one way banks try to hold on to their employees, but salary increases by major players like Zenith often trigger a domino effect, forcing competitors to follow suit. The adjustments mean that executive trainees (ETs), previously earning ₦245,000 monthly, will now take home ₦294,000. Assistant banking officers (ABOs) on a ₦609,000 salary will see their pay rise to ₦730,800, and banking officers (BOs) on ₦800,000 will now earn ₦960,000. The 20% – 30% raise will mean a bigger wage bill for Zenith Bank. As of September 2024, the bank’s personnel expenses reached ₦97.496 billion, accounting for 22.86% of its overall expenses in the period under review. Zenith Bank has the second lowest wage bill among tier-1 commercial banks. GTBank, Nigeria’s cost-efficiency leader in commercial banking, spends the least on personnel expenses. It is an industry-wide response, prompting several tier-1 and tier-2 banks to review their compensation structures. In recent months, competitors Guaranty Trust Bank, Union Bank, and Sterling Bank have also announced salary adjustments, though percentages vary. It also suggests that these measures are not only a response to economic pressures but also a strategic effort to reduce the risk of employee attrition, particularly as skilled professionals seek better opportunities abroad.
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