The Central Bank of Nigeria (CBN) has announced that there are now ten licensed digital banks in Nigeria to provide microfinance banking services in the country. These banks primarily operate through mobile apps and despite being entirely digital, they enjoy the same rights and privileges as traditional banks.
Digital banking is gaining momentum in Nigeria as fintech companies utilize advanced technology to tackle Nigerians’ financial problems and deploy tech-savvy personnel. To promote financial inclusion, the CBN has authorized digital payment platforms to provide microfinance banking and Point of Sale (PoS) services in Nigeria.
These digital banking platforms are everywhere, even though they are confined to digital spaces. They have recently resolved several financial issues for Nigerians. These fintech platforms fall under the fintech ecosystem but serve the same purpose as traditional banks that have a physical presence.
Fintech platforms operate under various licensing categories and offer multiple services, providing financial services through mobile apps and other touchpoints. As of February 2023, approximately 894 companies have been licensed as microfinance banks, as per the CBN database. However, only a few fully digital companies can be considered digital banks.
Some of the names of the digital banks approved by the CBN include Sofri, Mint, Piggyvest, VFD, Moniepoint, FairMoney, Carbon, Kuda, Eyowo, and Sparkle.
The growth of digital banking in Nigeria is remarkable, and it is expected to increase as more Nigerians become aware of the benefits of using digital banking services. Digital banking is convenient, fast, and secure, enabling Nigerians to conduct financial transactions from the comfort of their homes or offices. The CBN’s approval of digital payment platforms to operate microfinance banking and PoS services is a welcome development that will boost financial inclusion in the country.