Nigeria is now in the midst of an economic downturn. This has impacted negatively on the banking industry in Nigeria which has resulted in the closure of several banks in the country. This will be an excellent chance for individuals to embrace digital banking as the financial industry’s future.
Digital Banks are financial institutions that provide online payment and investment services through mobile devices and the internet. Digital Banks grew rapidly from 2016 to 2020. In this paper, we have collated a list of the top 10 digital banks that are expected to experience high growth from 2021-2026 in Nigeria.
Top 10 Digital Banks in Nigeria in [year]
1. V for VFD (Vbank)
VFD (Virtual Financial Dal) is a subsidiary of Vodacom and it was launched in Nigeria on March 8, 2020. The bank secured a license to operate as a Virtual Payment Bank from the Central Bank of Nigeria. The bank provides savings and loans services among others.
The bank attained 100000 customers in 6 months of opening. Currently, the bank has over 500000 registered users and over $11 million worth of loans disbursed. It also serves over 10,000 merchants across Nigeria with a click of a button and has processed an estimated $500 million in transactions in one year.
2. ALAT Digital Bank
In June 2018, the Central Bank of Nigeria licensed 3 new banks. These new digital banks are Fincare Remit, a subsidiary of FBN Holdings, Transcorp e-Wallet, and Alat.
The Alat digital bank began in 2017 with the aim of providing financial services to unbanked citizens of Nigeria and e-payment solutions for businesses on a national scale.
Alat is the first universal payment solution in Nigeria that aims to resolve the issue of fragmentation faced in Nigeria’s e-payment space and also encourage financial inclusion. It provides a solution for merchants for easy payment processing.
The bank allows customers to deposit money through cash or Direct Deposit, withdraw funds through cash or ATM withdrawals and inter-account transfers.
3. KUDA Digital Bank
The digital bank was awarded the Virtual Payment Bank license by the Central Bank of Nigeria in 2018 and launched 2017. It provides customers with savings accounts paying between 6-7% interest.
The bank also offers loans against collateral, including gold at 12%. It provides solutions for businesses for payment processing through KUDA e-Wallet and a mobile application.
The bank also accepts funds from other banks’ accounts, cash deposits, and withdrawals. It has a partner network of over 200,000 registered merchants, including top supermarkets and retail chains.
4. Rubies Digital Bank
Rubies Digital Bank closed pre-launch funding of $25 million from a group of international investors in January 2018. It obtained a virtual bank license from the Central Bank of Nigeria in the same month.
The bank is currently recruiting top management and technical staff across the country to drive its standards in terms of service delivery, customer experience, and regulatory compliance.
The bank provides a personalized digital platform that allows customers to manage their funds from multiple accounts through one account. It also offers loans of up to N1 million at a maximum interest rate of 12%. In addition, the bank will have a partner network of over 200,000 merchants across Nigeria.
5. OneBank
OneBank completed its bank registration application at CBN in July 2017. The application was finalized after the submission of relevant documents in December 2017.
OneBank has received e-money license from the Central Bank of Nigeria to operate as a Mobile Wallet and E-Money Issuing Company in November 2017. OneBank got a Virtual Payment Bank License from the Central Bank of Nigeria in June 2018 while it received a full banking license from the Central Bank of Nigeria in October 2018.
6. Sparkle Digital Bank
Sparkle Digital Bank was granted a virtual banking license by the Central Bank of Nigeria in June 2018. The bank obtained its e-money license from the Central Bank of Nigeria in September 2018. Sparkle Digital Bank launched officially on September 19, 2019.
7. Eyowo Digital Bank
Eyowo Digital Bank is expected to be the seventh digital bank to launch in Nigeria. Eyowo is a Deposit Money bank (DMBs) with a license to operate as a Payment Solution Provider (PSP).
Eyowo provides business process outsourcing services to both corporates and individuals. The bank also offers a mobile money transfer service called ‘e-transfers’ for instant, secure international inward remittance of funds into Nigeria through any local commercial bank account at a highly competitive exchange rate with a fund pick-up at a local bank branch in Nigeria.
8. Gomoney
Gomoney is a digital banking platform that allows Nigerians to buy, sell and convert local currency into bitcoin. It was founded in 2011. Gomoney operates on a mobile app platform through which users can deposit and withdraw money, buy and sell bitcoins.
The digital bank also provides solutions for businesses like payment processing, IBFT (Inter-Business Fund Transfer) within the Naira currency only (no conversion to dollars or any other currency is needed). It also has a partner network of over 200,000 registered merchants across Nigeria.
9. Fundall Digital Bank
Fundall Digital Bank received a Virtual Payment bank license from the Central Bank of Nigeria in October 2018. The bank started processing customers’ applications for opening savings and current accounts in the Nigeria currency, Naira.
Fundall provides a mobile-money solution for its customers. Fundall Mobile wallet is a quick and easy way to deposit, withdraw funds from your Fundall account as well as instantly send money to friends, family, or business associates through their mobile phones.
The bank also offers the following services:
- Instant Cash withdrawal from any ATM
- Transfer from other banks’ accounts
- Mobile Money transfer to other bank customers FAST!!!
- Transfer from Fundall account to any MPESA number in Kenya
- Reload airtime for all networks across the globe.
10. Mintyn
Mintyn is a Nigeria-based digital bank that offers Personal Banking Services. Mintyn provides personal loans, online card access, and Single Card Payments for all ATM withdrawals. The service includes a free Direct Debit service that allows payment of utility bills such as DSTV, Cable TV, Airtel, Etisalat, Ntel and etc.
Mintyn is the 10th digital bank to launch in Nigeria on our list though it was launched in September 2007. The bank also offers an instant mobile card top-up service called MintChips which allows users to instantly reload their mobile lines by sending money directly to any mobile phone number in Nigeria.
The bank also offers the following services:
- Loans
- Card Access (for ATM Withdrawals)
- Business Account (Personal Bank Account for Small Businesses)
Instantly send money to friends, family or business associates through their mobile phones.
The bank also offers the following services:
- Instant Cash withdrawal from any ATM
- Transfer from other banks’ accounts
- Mobile Money transfer to other bank customers FAST!!!
- Reload airtime for all networks across the globe.
- Online Card Access and Single Card Payments
Final Thoughts
Although, only 10 digital banks across the world have recorded profitability. There has been a large number of suicide cases reported in India because of their unavailability. It is necessary that Nigeria’s central bank and financial regulation agencies take proactive measures to ensure there is no unnecessary loss and unrest as the launch of these digital banks progress. Small and medium scale businesses owners are also being encouraged to open accounts with digital banks for easy access to funding, especially at the point of sales.