Kuda Microfinance Bank has achieved a significant regulatory milestone by obtaining approval from the Central Bank of Nigeria to operate as a National Microfinance Bank. This development marks a strategic expansion beyond the bank's digital-only origins, authorizing the establishment of physical banking operations throughout Nigeria.
From Digital Pioneer to Hybrid Banking Model
The newly granted national licence effectively removes previous geographic restrictions that confined Kuda's physical presence to a single location under its former Unit Microfinance Bank licence. This regulatory upgrade represents a pivotal moment in the evolution of one of Nigeria's most prominent financial technology brands, transitioning from an app-only service to an institution with nationwide physical reach.
Strategic Balance Between Digital and Physical Presence
Kuda Bank leadership emphasizes that this expansion does not signify a departure from their digital-first approach. The institution remains committed to its core digital banking services, including app-based transfers, bill payments, savings products, and instant credit facilities. The physical expansion serves as complementary infrastructure rather than a replacement of their technological foundation.
Musty Mustapha, Managing Director and Chief Executive Officer of Kuda Microfinance Bank, explained the strategic rationale behind this development. "Securing a national microfinance banking licence strengthens our relationship with the Central Bank and affirms our commitment to operating at the highest standards of compliance as we scale," he stated.
Physical Touchpoints for Enhanced Customer Experience
The bank plans to establish customer experience centres across multiple states, following the model of their existing facility in Yaba, Lagos. These physical locations will provide in-person support, community engagement opportunities, and direct interaction with Kuda staff members.
Mustapha clarified the bank's hybrid approach: "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. This allows us to serve Nigerians across the country in whichever ways are most convenient for them."
Regulatory Alignment and Industry Implications
The national licence brings Kuda's regulatory status fully in line with the Central Bank's framework for microfinance banks, strengthening its compliance position as it expands operations across Nigeria. Importantly, this regulatory upgrade does not alter Kuda's current product offerings or transaction limits for existing customers.
Broader Fintech Industry Trend
Industry analysts view Kuda's expansion as part of a larger trend within Nigeria's financial technology sector, where leading digital banks are increasingly blending technological innovation with selective physical presence. This hybrid approach aims to build greater customer trust, enhance service experience, and meet evolving regulatory expectations.
The Central Bank of Nigeria has recently granted similar national licences to other financial technology firms and microfinance banks, including prominent digital payment providers like Opay and Moniepoint. This regulatory shift signals the CBN's intention to expand access to digital banking solutions nationwide while maintaining appropriate oversight frameworks.
Future Expansion Plans
Subject to additional regulatory approvals, Kuda intends to roll out more experience centres designed specifically for customer support and community engagement. These facilities will maintain the bank's technological ethos while providing tangible touchpoints for customers who prefer or require in-person banking interactions.
The transition positions Kuda not merely as a fintech disruptor but as a hybrid financial institution with nationwide reach and strengthened regulatory backing. This strategic move reflects the evolving nature of banking services in Nigeria, where digital convenience and physical accessibility increasingly converge to serve diverse customer needs across the country.
