Africa: Exploring Moniepoint’s Potential Move Toward a Commercial Banking Licence

Moniepoint has had an impressive few days. Fresh off a successful $110 million funding round, the company shared a heartfelt video on its journey, capturing attention across the ecosystem. Soon after, Moniepoint appointed former Stanbic IBTC CFO, Bayo Olujobi, as its new Chief Financial Officer.

Olujobi’s local banking experience contrasts with the trend of hiring CFOs without African backgrounds, as seen with Flutterwave’s recent hires aimed at an anticipated IPO. His appointment has sparked discussions on Moniepoint’s next strategic steps, with many wondering if a commercial banking licence could be on the horizon.

This article explores the potential advantages of Moniepoint seeking a commercial banking licence and what that shift might entail. For further context, see our previous coverage of Moniepoint’s pan-African ambitions.

The Potential Advantages of a Commercial Bank Licence for Moniepoint

As fintech companies mature, they often start resembling traditional banks, with larger customer bases and more regulatory oversight. For Moniepoint, a commercial banking licence could provide new growth avenues.

According to former banker Kuro Ngoboh, a commercial bank licence could broaden Moniepoint’s offerings, particularly in foreign exchange—a significant revenue stream for traditional banks in recent years. This licence would allow Moniepoint to expand its financial services beyond its current scope, offering more comprehensive solutions to clients.

Banker Mr. Ijezie echoes this view, noting that Moniepoint’s existing business may face growth limits within Nigeria’s economic landscape. A commercial banking licence, he suggests, could help Moniepoint overcome these constraints and strengthen its competitive edge.

“They aim to create a suite of payment and cross-border solutions for African businesses,” Ijezie says. “However, without a commercial banking licence, revenue growth may stall. The real opportunity lies in banking services like FX, treasury, import finance, and commercial loans—areas that have proven resilient in USD terms.”

With nearly a decade of experience serving businesses, Moniepoint has a strong foundation of trust and reliability. This track record could position Moniepoint as a competitive player in the banking sector. Ngoboh believes Moniepoint’s reputation for speed and efficiency offers a substantial advantage over newer banks.

Moniepoint’s CEO, Tosin Eniolorunda, recently hinted at the company’s aspirations: “To manage a large customer base with the expected level of trust, securing a banking licence is essential.”

For Moniepoint, a commercial banking licence would also bolster consumer confidence. Although neobanks have improved service standards in Nigeria, they still face skepticism regarding their stability. A commercial bank licence could reassure the public of Moniepoint’s longevity and commitment to the market.

Challenges of Transitioning to a Commercial Bank

Moving from a microfinance institution to a commercial bank is no small feat. While Nigeria’s underbanked population presents an opportunity—only 64% of Nigerians have formal financial services—Moniepoint must navigate several challenges.

Operational costs would likely surge, from setting up physical branches to managing a larger workforce. Fortunately, with over 2,000 employees, Moniepoint is no stranger to scaling its operations. Additionally, the transition may require significant upgrades to its technology infrastructure, demanding investment in either in-house talent or outsourcing.

A commercial bank licence would also bring heightened regulatory oversight, which some view as a potential brake on growth. However, Ijezie argues that regulatory requirements strengthen the sector by ensuring stability and trust.

“Regulation builds the foundation needed for safe operations,” he explains. “The primary challenge for banks is capital, but Moniepoint’s recent capital raise of nearly ₦200 billion puts them in a strong position.”

Ultimately, Moniepoint’s decision to pursue a commercial banking licence will depend on its strategic goals. However, the potential benefits are significant, and such a move could inspire future fintech entrepreneurs to enter the banking space.

By securing a commercial bank licence, Moniepoint stands to redefine its role in the financial sector and set a precedent for the evolution of fintech companies across Africa.