Kuda Eyes Hybrid Banking With New National Licence

After obtaining a National Microfinance Bank licence from the Central Bank of Nigeria (CBN) late last month, Kuda Microfinance Bank (Kuda MFB) is making the switch to a hybrid banking model. The geographical limitations of its prior “unit” licence, which restricted physical activities to a single location in Lagos, are eliminated with this update.

Under its recently granted national licence, Kuda Microfinance Bank has stated that it will integrate its digital-first operations with physical touchpoints around the nation.

This was revealed in a statement that the business released on Friday. Kuda Microfinance Bank’s licence was recently upgraded to a national one by the Central Bank of Nigeria, allowing it to operate physically throughout the country.

Kuda MFB’s operations were geographically limited, as its unit microfinance bank licence (valid until Dec 2025) permitted only one physical location.

These geographical limitations are lifted by the national licence, enabling the bank to establish customer experience centres across the nation. Additionally, it brings Kuda MFB’s licensing status into compliance with the Central Bank’s microfinance bank structure.

“Securing a national microfinance banking licence is an important step for us as a regulated institution,” stated Musty Mustapha, Managing Director and Chief Executive Officer of Kuda MFB, in reference to the new licence. It reaffirms our dedication to operating at the highest levels of compliance as we grow and fortifies our relationship with the Central Bank.

“This licence gives us the flexibility to create more physical touchpoints where customers want in-person support or engagement, allowing us to serve Nigerians across the country in whatever ways are most convenient for them, even though we remain digital at our core.”

The bank claims that the national licence is more about operational flexibility and regulatory alignment than it is about abandoning its digital-first business model. As a result, it will keep leading the way in digital banking services, providing Nigerians with the ease of making payments and transfers, saving money, and getting instant credit through the Kuda app.

It also disclosed that, subject to regulatory approval, Kuda MFB intends to open additional experience centres for community involvement and customer support, modelled after its current experience centre in Yaba, Lagos, where clients and members of the public can speak with the Kuda team directly to receive assistance and learn about the microfinance bank’s offerings.

Kuda intends to establish experience centres in each of Nigeria’s 36 states while continuing to be “digital-first”. Instead of operating as conventional high-traffic branches, these hubs will concentrate on providing in-person customer service and community involvement.

Since Kuda’s real operations had already outgrown the regional scope of its prior unit licence, the new licence regularises Kuda’s position.

Kuda’s minimum paid-up capital requirement has increased from 200 million to 5 billion due to the switch to a nationwide licence.

Kuda MFB stressed that while its national licence offers the legal support for a countrywide presence, it does not alter its current product offerings or transaction capabilities.

Kuda insists that its core product offerings, such as transfers, savings, and rapid credit, will continue to lead through the Kuda app despite the physical growth.

Stricter control is also required by the national licence, including the publication of yearly reports in national publications and improved consumer protection procedures. This action puts Kuda in line with other significant fintech companies, such as OPay and Moniepoint, which were also given national upgrades to formally expand their reach across the country.