With over 700 microfinance banks licensed by the Central Bank of Nigeria (CBN), it can be challenging to determine which microfinance bank truly stands out from the crowd or which one would cater to the services you need.
That’s why we created this comprehensive guide highlighting the Top 10 Microfinance Banks in Nigeria. We have thoroughly researched and evaluated the leading players in the industry to spotlight the best microfinance banks that are exemplary in their operations and transformative for their customers.
Through this guide, you’ll gain insights into each bank’s areas of specialization, products and services, branch network, customer base, and more. We’ll objectively analyze their pros and cons, innovations, and key factors that have propelled them to become industry leaders.
Whether you’re an aspiring entrepreneur seeking start-up capital, a small business owner looking for business-friendly banking, or simply someone interested in financial inclusion, this guide will empower you to make informed decisions about which top microfinance bank best aligns with your needs.
1. KUDA Microfinance Bank
Kuda Bank has made a big impact on the Nigerian financial services industry. Formerly known as Kudimoney, it has rebranded itself as KUDA and positioned itself as a major microfinance bank. The bank has raised over $90 million in capital and has gained popularity among the youth as “the bank of the free.”
One of the standout features of Kuda Bank is its user-friendly app, which makes it easy for new users to sign up and access a wide range of banking services. The app offers services such as personal and business banking, including options for savings, investments, transfers, and payments. It also provides a Kuda Card for cashless transactions and offers free transfers to other banks.
Kuda Bank’s digital banking approach and commitment to financial inclusivity have set a new standard in the industry. The app provides seamless and personalized experiences, and the bank’s focus on customer satisfaction has garnered positive feedback from users.
Products & Services
Kuda Bank, as a microfinance bank, offers a range of features that cater to the needs of its customers. Some of its key features include:
- Kuda Bank operates through a user-friendly mobile app, providing convenient access to banking services.
- It offers 25 free transfers to other banks every month, making money management cost-effective for customers.
- Kuda Bank provides options for customers to save and invest their money, fostering financial growth opportunities.
- Customers can obtain a Kuda Visa card through the app, enabling cashless transactions online and offline.
- Kuda Bank facilitates easy payment of essential bills and the purchase of gift cards through its app.
- It offers various channels for customer support, ensuring easy access to assistance.
- With its tech-driven platform, Kuda Bank aims to make banking services more accessible, particularly to the youth.
Pros
- Kuda Bank’s app is easy to use and allows for quick registration and access to various banking services.
- Its tech-driven platform has made banking more accessible to a wider audience, particularly youths.
Cons
- As a digital bank, Kuda Bank may not have physical branches, which could be a drawback for customers who prefer in-person banking.
2. LAPO Microfinance Bank
Since its establishment in the 1980s, LAPO Microfinance Bank has become a big player in Nigeria’s microfinance sector. It’s focused on helping people with low incomes by offering them financial services that are designed to meet their specific needs. The bank works to include more people in the financial system and to help them become more financially secure.
Through partnerships and events, like its collaboration with The World Savings Banking and Retail Institute, the bank shows that it’s committed to making sure that everyone has access to financial services and can bounce back from tough times.
By increasing its staff’s salaries, the bank is also showing that it cares about the people who work for it and wants to help them during difficult economic times.
Products & Services
LAPO Microfinance Bank offers a range of features that cater to the needs of its customers, particularly those with low incomes. Some of its key features include:
- The bank provides financial services that are designed to be long-lasting and beneficial for its customers, especially those with limited financial resources.
- LAPO Microfinance Bank focuses on offering financial solutions that are accessible and relevant to low-income individuals and small businesses, aiming to include more people in the financial system.
- The bank’s services are geared towards empowering low-income households and small businesses, helping them become more financially secure and resilient.
Pros
- Economic empowerment
- Inclusive financial services
- Staff welfare
Cons
- Limited branch information
3. Fina Trust Microfinance Bank
Fina Trust Microfinance Bank was established in 2009, it focuses on helping small businesses and individuals by offering various financial services. One standout aspect is its connection with LOLC Group, the biggest non-banking company in Sri Lanka. This affiliation brings experience and strength to Fina Trust, making it a reliable choice for customers. This connection allows Fina Trust to bring international expertise to its local operations. For customers, this could mean access to innovative financial solutions and a broader perspective on managing their finances.
Fina Trust is committed to tailoring its financial solutions to fit the unique needs of its customers. Whether it’s quick loans, salary advances, or support for small and medium-sized businesses, the bank aims to provide options that suit different financial situations. This customer-centric approach suggests a dedication to understanding and meeting the diverse needs of the people it serves.
The bank places importance on modern banking practices. With an emphasis on online banking and e-channels, Fina Trust understands the changing needs of its customers. This approach aligns with the desire for convenient and accessible banking services, allowing individuals to manage their finances whenever and wherever they need.
Products & Services
- Fina Trust offers quick loans, SME loans, savings, and more, addressing diverse financial needs.
- User-friendly online banking aligns with modern lifestyles, ensuring banking convenience anytime, anywhere.
- Hassle-free process – open an account, deposit 20%, fill out a form, and receive quick loan disbursal.
- Customize loan amount, term, and repayment schedule based on individual circumstances.
Pros
- Fina Trust is a one-stop solution with a broad range of financial products.
- Affiliation with LOLC Group enhances credibility and financial stability for customer reassurance.
- Emphasis on user-friendly online banking ensures convenient and accessible services.
Cons
- Online strength, but a drawback for those preferring in-person banking experiences.
- Clearer details on interest rates and fees would improve transparency and customer trust.
4. ACCION Microfinance Bank ACCION
ACCION Microfinance Bank, founded in 2006, is dedicated to helping small business owners and low-income earners by offering sustainable and ethical financial services. The bank provides different kinds of loans, such as those for small businesses, buying a home, funding education, and more.
Customers can easily get quick loans of up to N150,000 through ACCION’s mobile banking or USSD channels, making financial assistance more accessible.
Products & Services:
- ACCION offers versatile loans for small businesses, homeownership, and education, meeting diverse customer needs effectively.
- Via mobile banking or USSD, ACCION provides speedy loans up to N150,000, crucial for immediate financial needs.
- ACCION, like LAPO, is a national microfinance bank, ensuring wide accessibility and empowering micro-entrepreneurs nationwide.
Pros:
- ACCION’s commitment to empowering micro-entrepreneurs and low-income earners showcases dedication to social impact and financial inclusion.
- Quick, accessible loans through mobile banking cater to those without easy access to traditional banking, ensuring convenience.
Cons:
- Privacy notice emphasizes data processing for improved banking, but user concerns may require clearer communication and assurance.
5. AB Microfinance Bank
AB Microfinance Bank, established in 2008 and headquartered in Lagos, is a prominent microfinance bank in Nigeria.
The bank is known for its focus on providing financial services to micro and small enterprises, offering micro-loans, SME loans, and housing loans. Customers can also open savings accounts and current accounts with the bank.
Products & Services
- AB Microfinance is dedicated to empowering micro and small enterprises, contributing to financial inclusion in Nigeria.
- The bank offers micro-loans, SME loans, and housing loans, catering to various financial needs.
- With a national presence and headquarters in Lagos, AB Microfinance ensures widespread accessibility for micro-entrepreneurs across the country.
- Customers benefit from convenient mobile banking services, providing flexibility for managing finances on the go.
Pros
- Customers praise the bank’s supportive loan services
- Helpful staff.
Cons
- Limited branch information on the website could be inconvenient for customers seeking physical locations.
6. Assets Microfinance Bank
Assets Microfinance Bank, established by the Central Bank of Nigeria, is dedicated to providing personal, business, and payday loans to Nigerians.
In addition to these loan services, the bank also offers savings and investment opportunities. What sets Assets Microfinance Bank apart is its unique products tailored to empower businesses, making it a notable player in the industry despite being relatively new.
Products & Services
- Assets Microfinance Bank provides personal, business, and payday loans to its customers, catering to various financial needs.
- The bank offers savings and investment services, allowing customers to grow their wealth and secure their financial future.
- Assets Microfinance Bank has developed unique products specifically targeted at empowering businesses, distinguishing itself in the market.
Pros:
- The bank’s unique products and loan services are designed to empower Nigerian businesses and individuals, contributing to economic growth and financial stability.
- Being established by the Central Bank of Nigeria adds to the bank’s credibility and trustworthiness.
Cons:
- As a relatively new player in the industry, customers may have limited historical data to assess the bank’s long-term performance and stability.
7. Mutual Trust Microfinance Bank
Mutual Trust Microfinance Bank, formerly known as Mark de Rock Microfinance Ltd, has been on a mission to redefine microfinance in Nigeria since its rebranding in April 2016. The bank prides itself on providing excellent financial services through the use of cutting-edge technology and a highly experienced workforce.
One of its standout features is the quick and efficient loan application process, which takes less than 10 minutes to complete, with loan applications being analyzed and approved within 10 hours. Additionally, the bank offers a very flexible repayment plan, allowing customers to easily offset their loans without stress.
Products & Services
- Customers can complete their loan applications with the right details and documents in under 10 minutes.
- The bank prides itself on analyzing, approving, and disbursing loan funds to customers’ accounts in 10 hours or less.
- Regardless of the loan amount, Mutual Trust MFBank offers flexible repayment plans to suit customers’ needs.
- The bank emphasizes a customer-focused approach, using cutting-edge technology and a highly motivated workforce to create a delightful banking experience.
Pros
- Customers can access prompt loans with minimal hassle.
- The bank’s flexible repayment plans cater to diverse customer needs.
- Mutual Trust MFBank is dedicated to exceeding customer expectations through its services and technology.
Cons:
- The bank’s website does not provide detailed information about its physical branch network, which could be inconvenient for customers seeking in-person assistance.
8. Sparkle Microfinance Bank
Sparkle Microfinance Bank, established in 2019 by former MD of defunct Diamond Bank Uzoma Dozie, heavily relies on technology to offer financial services through its mobile app.
The bank’s mission is to democratize access to finance for both small businesses and individuals, and customers can access a host of financial services through the Sparkle mobile app, available on both Google Play Store and the iOS store.
Products & Services
- Customers can open a Sparkle account in minutes using their smartphones, without the need for physical documents or bank queues.
- This feature allows users to save money as they like, periodically, with investments, and in groups, providing flexibility in saving.
- The bank offers tools to analyze and categorize expenses, providing insights into spending habits and financial management.
- Sparkle enables easy money transfers, bill payments, and innovative payment features such as scheduled payments and QR payments.
- Customers can enjoy seamless payments with Sparkle’s physical debit card, with added features like card controls and limits for expense management.
- The bank plans to offer quick cash loans without the need for paperwork, collateral, or guarantors.
Pros
- The digital account opening process and mobile app provide customers with convenient banking services.
- Features like Sparkle Stash and innovative payment options offer flexibility in managing finances.
- The bank emphasizes transparency and aims to improve customers’ financial lifestyles.
Cons
- As of now, the physical debit card delivery is limited to Lagos, Nigeria, potentially limiting access for customers outside this area.
- The availability of certain services, such as loans, is listed as “coming soon,” which may disappoint customers seeking these offerings immediately.
9. VFD Microfinance Bank
VFD Microfinance Bank, also known as VBank, is a subsidiary of VFD Group and has been marketed as the go-to MFB for the trendy at heart. The bank’s services are fully digitized, and the VBank mobile app is one of the most advanced and streamlined to get customers more.
The bank is focused on digitization and offers a range of services, including savings accounts, current accounts, and loans.
Products & Services
- VFD Microfinance Bank offers a fully digitized banking experience through its VBank mobile app, providing easy access to accounts, secure transfers, withdrawals, and bill payments.
- The bank’s app includes easy-to-use budgeting features and analytics, allowing customers to manage their finances effectively.
- In partnership with Artsplit and Anchoria Asset Management, VFD Microfinance Bank provides art-based loans to collectors and corporate clients, offering liquidity while retaining ownership of their artwork.
Pros:
- Zero charges
- VFD Microfinance Bank emphasizes innovative and stress-free banking, with a focus on customer convenience and transparency.
- Referral program
Cons:
- Limited availability
- Pending services
10. BoI Microfinance Bank
BoI Microfinance Bank, a subsidiary of Nigeria’s Bank of Industry, was established in 2002 to provide financial support to small, medium, and large business projects, as well as the expansion, diversification, and modernization of existing ones.
The bank caters to SMEs and low-income earners, offering easy loans and savings deposit services. With the financial backing of the Bank of Industry, BoI Microfinance Bank is well-positioned to serve its customers effectively.
Products & Services
- BOI-ITC offers a wide range of financial services, including retirement and estate planning, business solutions, and wealth management.
- The bank provides trustee services for various purposes, such as issuance of bonds and debentures, loan syndication, and administration of different types of trusts.
- BOI-ITC assists business owners with succession planning, ensuring a smooth transition of ownership and maximizing the value of the business.
Pros:
- The bank offers to finance for LPOs, trade, import and export, commercial papers, and short-term credit facilities, catering to various business needs.
- Dedicated Financial Consultants design flexible and customized long-term financial strategies to help clients achieve their goals.
Cons:
- Limited information
Guidelines to Take When Selecting a Microfinance Bank
When selecting a microfinance bank, consider the following guidelines:
- Reputation: Research the bank’s reputation, customer reviews, and track record to ensure reliability and trustworthiness.
- Services Offered: Assess the range of financial services offered, such as loans, savings accounts, and digital banking options, to ensure they meet your specific needs.
- Interest Rates and Fees: Compare interest rates, fees, and charges to understand the cost of borrowing and banking with the institution.
- Accessibility: Consider the bank’s branch network, digital banking capabilities, and customer service to ensure convenient access to services.
- Financial Inclusion Mission: Look for a bank that is committed to financial inclusion and empowering micro and small enterprises.
- Regulatory Compliance: Ensure the bank is licensed and regulated by the appropriate financial authorities to guarantee security and compliance with industry standards.
By considering these guidelines, you can make an informed decision when selecting a microfinance bank that best suits your financial needs and goals.
Conclusion
The top 10 microfinance banks outlined in the article were reviewed by our financial experts, however, it is important that you consider each of their pros and cons to be sure of which microfinance bank suits your needs