Flutterwave, a pan-African fintech, has secured a national microfinance banking licence in Nigeria, allowing it to hold customer deposits and issue loans directly for the first time in its biggest market.
The licence, which came through Flutterwave’s acquisition of open banking startup Mono in January, marks a turning point for a company that has spent a decade moving money for businesses and consumers. Flutterwave is now positioning itself as the infrastructure its customers bank on, a move with direct implications for its margins, IPO timeline, and relationship with the commercial banks it has long depended on.
The licence removes the company’s dependence on third-party banks for virtual accounts, cards, and fund settlement and will improve margins, its chief executive officer said. Flutterwave is not alone in this move. Three months ago, Paystack acquired a Nigerian microfinance bank, giving it the same ability to offer banking services to business customers.
“$40 billion has gone through our platform. That is not double-counting, and not one cent was retained,” Flutterwave’s chief executive officer, Olugbenga Agboola, told TechCabal. “With this new phase of life, money now stays in our platform. Margins get better. That’s the value of owning infrastructure.”
Flutterwave has since injected additional capital to shore up the bank’s capitalisation, Agboola said.
Flutterwave Bank will operate as a subsidiary of Flutterwave’s Nigerian entity, with its own board and leadership team currently being constituted, a sign that the highest degree of corporate governance is key for Flutterwave, Agboola said.
Flutterwave already processes payments for companies like Uber, Microsoft, and Netflix, giving it a base to cross-sell banking products. If it can convert its payment customers into banking customers, it gains access to low-cost funding for its lending operations, backed by years of transaction data and the open banking infrastructure it acquired through Mono.
“With Mono Mandate, which we just introduced, it allows us to recover funds across all customers’ bank accounts linked to their BVN,” said Abdulhamid Hassan, Mono’s CEO. “Lending is really big, but non-performing loans are the biggest issue for any lender. With Mono’s infrastructure, that would not be a headache for us.”
“We just have to focus on innovative ways to lend to these customers and make sure that those loans are helpful for their businesses,” he added.
The new bank will be led by a fresh leadership team, separate from both the payments business and Mono’s existing management. Flutterwave’s Nigerian board chairman, a former director of the Central Bank of Nigeria, will help constitute the bank’s governance structure.
For years, Flutterwave helped these businesses move money, a low-margin business model built on volume. Banking them would allow Flutterwave to deepen each relationship and extract more revenue per customer, a shift that would improve unit economics and strengthen the company’s position ahead of a potential acquisition or IPO.
Since January, the Central Bank of Nigeria has moved toward more coordinated licencing for fintechs with nationwide operations. Given the capital requirements involved, acquiring a microfinance bank has become the most efficient path to regulatory certainty, product expansion, and scale.
A banking licence carries new security and regulatory obligations, but Mo Bammeke, chief compliance officer at Flutterwave, says the bank is prepared. “The infrastructure is already built to withstand a bank. It’s already at that global scale, both from a security perspective and also from a compliance perspective.”
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