Kuda to Expand Experience Centres After Securing National Banking Licence

Kuda Microfinance Bank is preparing to expand its network of experience centres across Nigeria following its recent approval by the Central Bank of Nigeria (CBN) to operate as a National Microfinance Bank.

The regulatory upgrade removes previous geographic restrictions and allows the digital-first lender to establish physical offices nationwide. The move is expected to improve customer support, strengthen complaint resolution, and deepen community engagement while maintaining Kuda’s mobile-first approach.

From Limited Physical Presence to Nationwide Operations

Before receiving the national licence, Kuda operated under a unit microfinance bank framework that restricted its physical presence to a single location. Although its digital platform served customers across the country, regulatory rules limited where the company could open offices.

With the new licence in place, those limitations no longer apply. Kuda can now establish multiple physical locations while continuing to rely primarily on its mobile and online services.

Securing a national microfinance banking licence is an important step for us as a regulated institution, said Musty Mustapha, MD/CEO of Kuda MFB.

The company says the expansion is designed to complement its digital services rather than replace them.

CBN’s Effort to Align Regulation With Fintech Growth

Kuda’s licence upgrade reflects a broader regulatory shift by the Central Bank of Nigeria aimed at bringing fast-growing fintech companies under more appropriate oversight structures.

As digital financial institutions expand rapidly, regulators are seeking to ensure that licensing frameworks reflect their scale, risk exposure, and systemic importance. The new approach is intended to improve transparency, protect consumers, and strengthen supervision across the sector.

On January 26, 2025, local media reported that the CBN had upgraded the licences of major fintech operators, including Moniepoint and OPay, to national status.

The apex bank said the upgrades were intended to ensure that customers, particularly those in the informal sector, can access physical offices nationwide to resolve complaints and receive support.

Rising Transaction Volumes Among Major Players

The scale of activity among Nigeria’s leading fintech firms highlights why regulators are tightening oversight.

In 2023, Moniepoint, which serves more than two million business accounts, processed an average of 433 million transactions per month and recorded an annual transaction value exceeding $150 billion.

In the first quarter of 2025, OPay, with more than 10 million daily active users, alongside PalmPay, helped drive mobile money transactions in Nigeria to ₦20.71 trillion, equivalent to $14.79 billion.

These transaction volumes place major fintech operators on a similar level to traditional banks in terms of market influence and financial risk.

Branch Expansion and Regulatory Requirements

Although CBN guidelines do not clearly outline a direct path for unit microfinance banks to become national institutions, they specify conditions for state-level banks seeking national status.

One of the major requirements is the operation of at least five branches, a standard that points to Kuda’s intention to roll out multiple offices in the coming months.

Each new branch must receive regulatory approval before opening. Establishing an office without authorisation attracts a ₦2 million fine from the CBN.

Kuda has stated that all physical expansion plans will comply fully with regulatory rules.

Stricter Reporting and Governance Obligations

Operating as a national microfinance bank brings significantly higher compliance and disclosure standards.

Under the new licence, Kuda is required to publish its annual financial statements in a national daily newspaper and adhere to enhanced audit, reporting, and risk management frameworks. These measures are designed to increase transparency and strengthen public confidence in digital financial institutions.

Minimum paid-up capital rises from ₦200 million for unit microfinance banks to ₦5 billion for national institutions. This increase reflects the higher operational and systemic risks associated with nationwide banking activities.

In 2024, Kuda raised $20 million at a $500 million valuation, strengthening its financial position ahead of the transition and improving its ability to meet regulatory expectations.

Maintaining a Digital-First Banking Strategy

Despite its growing physical footprint, Kuda maintains that its primary focus remains on digital banking.

The company will continue to prioritise services such as transfers, payments, savings products, and instant credit facilities for retail and business customers.

While we remain digital at our core, 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 whichever ways are most convenient for them, Mustapha said.

Strong Performance in Early 2025

Kuda’s recent operating results reflect its expanding role in Nigeria’s financial ecosystem.

In the first quarter of 2025, the company processed more than 300 million transactions valued at ₦14.3 trillion. During the same period, it issued ₦16.4 billion in overdrafts, representing a 43 per cent increase compared with the previous quarter. These figures underscore the bank’s growing influence in retail and small business finance.

Read More: Why the UK Tribunal Dismissed the Discrimination Case Against Kuda

Balancing Growth With Rising Operational Costs

The transition to national banking status introduces new financial and operational pressures.

Maintaining physical branches increases expenses related to staffing, property, security, technology infrastructure, and regulatory compliance. These additional costs may challenge the low-overhead model that initially gave digital banks a competitive advantage.

For Kuda, long-term success will depend on balancing innovation, efficiency, and regulatory discipline while maintaining affordable services for customers.

Implications for Nigeria’s Digital Banking Landscape

Kuda’s move toward nationwide physical operations signals a new phase in the evolution of Nigeria’s fintech sector.

Digital banks are increasingly becoming fully integrated financial institutions that combine advanced technology with traditional service channels.

By expanding its experience centres and strengthening regulatory compliance, Kuda is positioning itself as a hybrid banking platform capable of serving customers both online and offline.

If executed effectively, this strategy could reshape how millions of Nigerians access formal financial services in the years ahead.