Flutterwave Wins License to Operate as a Microlender in Nigeria

Takeaways by Bloomberg AI

• Flutterwave Inc. has secured a Nigerian license to operate as a national microlender and will be able to compete with banks for business.
• The Nigerian approval will allow Flutterwave to offer bank accounts, hold customer deposits and lend money subject to limits.
• Flutterwave plans to start the microfinance lender this quarter with offices in Lagos and Abuja, with an initial focus on small and medium-sized businesses.

Flutterwave Inc., Africa’s most valuable financial-technology unicorn, has secured a Nigerian license to operate as a national microlender and will be able to compete with banks for business.

The company joins global fintech firms such as Revolut Ltd. and Wise Plc in seeking banking licenses to accelerate expansion. The Nigerian approval will allow Flutterwave to offer bank accounts, hold customer deposits and lend money subject to limits. Such services that were previously provided to its customers by Flutterwave’s partner banks, its chief executive officer said.

“We’ve got a national microfinance bank license,” founder and CEO Olugbenga Agboola said in an interview. “The aim is to do whatever we can do to give the best reliability to our customers.”

The company already has licenses for payment services and cross-border money transfers in the West African nation. The additional microfinance license means it can now offer savings and loans products across the country.

Most Nigerian commercial lenders trail fintechs in their payment processing because of poor investment in tech infrastructure, pushing them to collaborate with fintech firms who in return gain access to their customers.

Nigeria limits how much a microfinance bank can lend to an individual or company based on a percentage of the bank’s shareholder funds, with most of its loan portfolio dedicated to micro-loans and not large corporate customers.

Flutterwave, launched in 2016, operates in around 35 African countries, accepts payments in more than 30 currencies and handles 500,000 payments daily, according to its website.

Agboola said the company plans to start the microfinance lender this quarter with offices in the commercial hub of Lagos and the capital Abuja, with an initial focus on small and medium-sized businesses.

“We want to control how their money moves and because we are compliance driven as a company, the right step is to hold a banking license,” he said.

Revolut won a British banking license earlier this month and is seeking approval in the US.