Nigeria: Kuda gets digital banking license in Pakistan

Kuda, a Nigerian-founded digital bank, has obtained a digital banking license in Pakistan. It applied as KT Bank in conjunction two Pakistani companies — Fatima Fertilizer and City School to emerge as one of the winners of the five available digital banking licenses.

Twenty parties submitted their bids for the licenses nine months ago and the five successful winners are listed below:

1. KT Bank (Kuda Technologies Ltd., Fatima Fertilizer Ltd. and City School Pvt. Ltd.);
2. Easy Paisa DB (Telenor Pakistan B.V & Ali Pay Holding Ltd.);
3. Hugo Bank (Getz Bros & Co., Atlas Consolidated Pte. Ltd. and M & P Pakistan Pvt. Ltd.);
4. Mashreq Bank (Mashreq Bank UAE); and
5. Raqami (Kuwait Investment Authority through – PKIC and Enertech Holding Co.)

After being issued no-objection certificates by the State Bank of Pakistan (SBP) which is the Central Bank of Pakistan, these joint ventures will now have to incorporate a public limited company and then apply for in-principle approval. Subsequently, they will commercially launch their operations.

It is interesting that Kuda would want to be operational in Pakistan which is really not a country with many Nigerian firms. However it might be entering into uncharted waters and seeking to open up the Asian market for Nigerians or Africans in general. As per media reports, its two joint venture partners, City School and Fatima Fertilizer are looking at use cases for education and agriculture while the fintech will power technology.

Founded in Nigeria by Babs Ogundeyi and Musty Mustapha in 2019, Kuda has major offices in London, Cape Town, and Lagos, Nigeria – where it operates as Kuda Microfinance Bank under license from the Central Bank of Nigeria.

Since inception, Kuda has raised over $90 million, with the most recent being $55 million in a Series B funding round in 2021. The company boasts of over 4 million customers but has been in a loss position since inception. It reported a loss of a loss of over ₦6 billion in 2021 with a revenue of N3 billion in the same year.

In November 2022, Kuda launched in the United Kingdom offering a remittance product for Nigerians in diaspora.