In a circular sent to banks seen by TechCabal, the apex bank increased the minimum capital requirement to $364.56 million or naira equivalent of ₦500 billion by March 31, 2026, to address rising macroeconomic challenges in Africa’s largest economy.

“The prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks have underscored the need for banks to raise and maintain adequate capital to enhance their resilience, solvency, and capacity to continue to support the growth of the Nigerian economy,” CBN said in a circular on Thursday.

Access Bank, Nigeria’s third most capitalised bank with $190.6 million (₦251.8 billion), would need to raise an additional $187.8 million (₦248.1 billion) to meet the new recapitalisation requirements of the central bank. 

On Thursday, the Holdco, Africa’s largest consumer bank, said that it will ask its shareholders to authorise the plans at an annual general meeting set for April 19.

Access’ wants to raise part of the funds by increasing its issued shares from ₦17.7 billion to ₦26.6 billion. The company has asked for regulatory authorisation to raise capital of up to ₦365 billion by way of a rights issue on such terms and conditions and on such dates as may be determined by the directors.

Access’ decision to recapitalise comes amid a rapid expansion in Africa, including a recent acquisition of Kenya’s National Bank of Kenya (NBK) from KCB Group in a deal estimated at $100 million.

Paul Russo, KCB Group CEO, revealed that keeping NBK would have required the bank to inject up to $60.7 million, despite sinking $106.3 million since buying it in 2019. The war chest will allow Access to expand its footprint in East Africa’s largest economy with the NBK acquisition.

Already, the bank has operations in 15 African countries with a keen interest in revving up its presence and becoming the largest bank on the continent by 2027.

Auto finance companies enable consumers to buy cars from dealers and be able to pay over a period of time. 

However, experts say shifts in vehicle pricing due to the FX crisis and market dynamics have significant implications for vehicle financing. 

Three companies that TechCabal spoke to said they are prioritising financing vehicles in areas of preference. This means measuring the demand for a particular vehicle, deciding whether the vehicle serves a commercial purpose, and assessing how affordable it is for consumers. 

“Ultimately, these changes reflect a dynamic adaptation within the vehicle financing sector to accommodate shifting market conditions and consumer preferences,” said Ojurongbe Damilola, head of technical services, Cars45.  

Max, for example, which historically financed motorcycles, bicycles, three-wheelers, and mini-buses (four-wheelers), said it has recently done more three-wheelers and motorcycles in the 11 Nigerian states where it operates. It has financed 33,000 vehicles so far. Max plans to finance 70,000 vehicles in 2024. 

For Carima, a B2B marketplace that allows dealers to make requests from other dealers for cars they don’t have in their lots, financing dealers is the better route to profitability. The company said it has financed dealers’ requests worth N400 million since January this year and has received back 100% of the loans. The platform has 3,000 registered dealers and overall access to 30,000 dealers. 

“We are financing dealers because they see cars as an asset while the normal individual sees cars as a liability. The dealer is buying a car because he wants to resell and make a profit,” Adebayo Tomiwa, CEO of Carima, told TechCabal. With 100% repayment done so far, Carima is now looking to expand the service. 

While prices of cars are on the rise, experts say the factors driving consumers towards vehicle financing include the ability to access a wide range of vehicles that financiers can now provide. Ojurongbe Damilola of Cars45, told TechCabal that this variety now allows individuals to select vehicles that meet both their preferences and financial realities. 

Another factor attracting consumers is expanded financing options due to more financing companies entering the market. This means that customers can now make their choices from a broader range of car loan providers. This also has led to more people embracing the concept of financing vehicles as they are more willing to consider vehicle loans as a viable option for buying cars due to the financial burden it takes off them. 

“This increased competition among financiers has made financing more accessible to a larger segment of the population,” Damilola said. 

However, there are concerns as to how the Central Bank of Nigeria’s Monetary Policy Committee (MPC) will affect loan interest rates, including car loans, if they continue to increase the benchmark interest rate. On March 26, 2024, the MPC hiked the benchmark interest rate by 200 basis points to 24.75%, from 22.75% recorded a month ago. Most of the financing companies often collaborate with financial institutions to access the funds they disburse as loans; an increase in base interest rate can also necessitate an adjustment in the rates offered by these companies. 

The exact funding amount was not disclosed. Pharmacy Marts raised  $2 million in funding from investors since its launch.

“We are excited about having Acasia Ventures on board, given its great presence in African markets that we are planning to enter, as well as their solid network of advisors and experts in the pharmaceutical industry,” CEO and Co-Founder of Pharmacy Marts Ahmed Kadous said.

Founded in 2021, Pharmacy Marts allows pharmacists to access medical products and connect them with suppliers. It also provides access to working capital and long-term financing, including “Buy Now, Pay Later” options. Pharmacy Marts claims it currently services about 12,000 of Egypt’s pharmacies, equivalent to 20% of the total market, and boasts over 200 suppliers on its platform. The startup says it aims to digitize the pharmaceutical sector’s supply chain to improve patient access to medication.

“In a short period, Pharmacy Marts has emerged as a category leader in this space and we are confident it will continue to go from strength to strength,” Managing Partner at Acasia Ventures Aly El Shalakany said.

The deal, a mix of debt and equity, was concluded last week, those people said, while declining to share the exact funding amount.

Over the last few weeks, some Nigerian fintech leaders began working together to keep Brass going, said one person with knowledge of the initial talks. “Brass is a great product that is valuable to customers,” that person said.

“The ultimate goal of this investment is service delivery,” said an investor who asked not to be named to speak freely.

The new capital injection will provide much-needed working capital for the startup after it furloughed employees on March 4.

“I’m happy to share that we’ve resolved these issues, and transactions are working seamlessly once again,” Brass said in an email to customers on Tuesday.

On Tuesday afternoon, several Brass customers shared on X that they had begun receiving pending withdrawals.

Brass did not respond to a request for comments.

Struggles at Brass

Users began noticing withdrawal delays in October 2023, and Sola Akindolu, the company’s CEO, told TechCabal that a major liquidity partner pulled out of a partnership, leaving the startup under significant strain. 

That partner was a major Nigerian fintech, said two people familiar with the matter. Until the middle of 2023, that fintech offered uncollateralised loans to several startups but eventually discontinued this service.

After it began experiencing liquidity problems, the startup approached Flutterwave for an acquisition, but that deal ultimately did not materialise, sources familiar with those talks said. A spokesperson for Flutterwave told TechCabal there were no acquisition plans between the two startups.  

“It is not in any way new for fintechs to approach and support one another behind the scenes,” Brass told TechCabal via mail in March.

The startup also approached larger startups like Moniepoint for a capital injection. Moniepoint declined to provide funding to Brass, according to a source familiar with those proceedings. 

Rwandan-based startup Kasha, Kenya’s Maisha Meds, and Egypt-based startups Dawi Clinics and Chefaa cumulatively raised $52 million across 33 deals, and were responsible for a 2,000% increase in funding to women-led companies in Africa’s healthtech industry. 

According to Jessica Vernon, CEO of Maisha Meds, her company’s funding came from solving problems with a business model that’s different from competitors. “We’re meeting people where they first go to get care: at private drug shops, pharmacies, and clinics. And we’re using technology to make those places more digital, efficient, and accessible,” Vernon told TechCabal. 

In 2022, women-led companies in healthcare were only able to raise $2 million across 26 deals representing 1.4% of all healthtech funding. The report from Salient Advisory noted that Kasha’s $21 million Series B funding was the largest investment ever made in a woman-led health tech company in Africa. Additionally, funding to mixed-gender founding teams rose to 21% in 2023 from 10% in 2022. 

The funding in these companies follows what the Salient Advisory report described as an impressive year for the general healthtech space, which received $167 million in 2023. While the general healthtech funding was 2% lower than what investors deployed in 2022, it was better than the broader African tech ecosystem, which saw a 39% funding decline. 

Women-led startups in Africa have, over the years, been largely overlooked by venture capital and private equity investors. But 2023 was a relatively good year for gender financing. Women-led startups raised just above $200 million, a +7% positive growth on a year-on-year basis, data from Africa: The Big Deal showed. 

The 2,000% funding growth is the first time the gender financing gap in health tech startups —and the ecosystem in general— is narrowing. The funding accounted for 31% of the total investment in health tech companies in 2023.

Investors in Maisha Meds and most of the other women-led companies include global development institutions such as USAID and the Bill & Melinda Gates Foundation. Funding from these institutions is mostly grants. 

Maisha Meds raised $5.25 million in scale-up stage 3 funding from USAID Development Innovation Ventures (DIV). Stage 3 grants are DIV’s highest level of funding awarded to innovators who have demonstrated the ability to scale up their proven solutions to critical challenges. 

Grants from institutions like the Bill & Melinda Gates Foundation, MSD, Cencora, Microsoft, and Chemonics have contributed to setting up women-led companies in health tech and the space in general. The report noted that over half (52%) of the 145 deals for African healthtech innovators in 2023 were grants indicating the important role that grants play in bridging funding gaps for early-stage healthtech innovators. This stands out as the largest source of grant funding on the continent. However, the total ticket size of grants was only 7% of the funding raised, with the average being $168,000. 

Equity funding in comparison, accounted for 91% of funding raised, with an average ticket size of $3.2 million. Experts say there are still barriers women founders or CEOs face in accessing private equity or venture capital funding.

These barriers are not necessarily from investors’ bias against female founders or CEOs, but they could stem from these women prioritising things like family over their business, hence they don’t show up enough for investors to see them, according to Ibijoke Faborode, founder of Africa Female Founders Collective (AFFC).  

AFFC which launched in February is planning a programme in 2024 that helps women founders or CEOs create more time for their startups and meet more investors who are interested in investing in their sectors. The goal is to help these startups focus on building the innovations that make them attractive to investors and also address problems in society.

Vermon pointed out that the specific women-led startups that were funded in the DIV round are those that are innovating on unique models for healthcare delivery, including a major emphasis on the last mile and underserved populations.  

Amaan Khalfan, CEO of Goodlife Pharmacy, East Africa’s largest private retail pharmacy chain, said investors would largely fund a business that has good record keeping and can position itself in a way that identifies the opportunities in the health tech space.

Jenne Nwokoye, founder of Clafiya, a digital health platform that has raised  $610,000 to date mainly from venture capital, said women-led startups are not raising much from VCs because there is little intentionality behind funding women-led businesses. 

According to Nwokoye, it would help if more VC funds were run by women entrepreneurs. However, she notes that women need to be more open in sharing funding opportunities. 

“For the next funding cycle, I’m going to be more intentional with the investors I want, i.e. finding investors who understand health, consumerism, and finance in Africa or in general,” she said. 

The number of 4G sites deployed by MTN Nigeria grew 2.7%, said Karl Toriola, the company’s CEO, during an investor call on Monday. That infrastructure expansion increased 4G usage among its customers from 79.1% to 81.5%. 

The number of MTN’s 5G sites saw the most growth rising from 588 to 2,106 sites and pushing 5G penetration to 11.3% from 3.1%. 

Airtel, another major telco, deployed its 5G networks in four cities, including Lagos and Abeokuta and is currently testing the network in Oshogbo. 

Telcos pour billions into infrastructure 

MTN Nigeria and Airtel Africa spent a combined ₦613 billion to expand their 4G and 5G networks by the end of 2022, regulatory filings from both companies show. 

MTN spent N504.33 billion on its network rollout, while Airtel invested N108.79 billion in the same period. Smartphone vendors also responded by increasing shipments of mostly 4G and 5G enabled devices, with data from Canalys showing a 12% growth in smartphone shipments to Africa in 2023. 

As of January 2024, TECNO leads the smartphone vendor market with 26.03%, followed by a sister brand, Infinix, with 20.88%. Samsung is in third place with 11.43%, while Apple is in fourth place with 9.66% of the market.

Growing infrastructure drives usage

By December 2023, 1.04% of internet subscribers in Nigeria used 5G. 4G users also grew to 31.33%, data from the Nigerian Communications Commission (NCC) showed. 

There were only 2.18 million 3G subscriptions in December 2023, while 2G usage, which still accounts for more than half of mobile internet subscriptions (57.84%), also declined.

The growth in 4G and 5G subscriptions happened despite supply chain disruptions and inflationary pressures that raised the prices of smartphones by 30%, data from GSMA showed. In response to those pressures, telecom companies partnered with asset financing companies and smartphone manufacturers to offer flexible financing options. 

Airtel’s partnership with iTel allows customers to buy a range of well-priced smartphones. 

“These deals are helping subscribers acquire 4G/5G devices and routers,” Sam Adeoye, Airtel Nigeria’s head of public relations, added. 

There’s a rising demand for smartphone financing given rising inflation in Nigeria, said Aisha Hussaini, founder of Keza Africa, a device financing startup. 

“Even people who would not have opted for device financing are now choosing it because of the naira devaluation,” Hussaini said.  

“The funding winter and the economic situation in Nigeria affect the abilities of companies of our kind to support many customers after some time,” said Sola Akindolu, the company’s CEO.

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While Brass raised $2m in 2021, Akindolu acknowledged the expensive nature of running a fintech startup.

“You can say you want to disrupt banks; if you raise $1-2 million, you must raise $5-10 million in a few years. If it is overdue and you have not, things will get tricky,” said Akindolu. “You need access to ridiculous capital.” 

Brass approached Nomba as part of conversations around a fundraise, two sources said. One highly-placed person said the company also discussed raising debt financing and expects to close funding in two weeks.

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“It is not in any way new for fintechs to approach and support one another behind the scenes,” Brass said in response to questions about raising money from Nomba. “We have been approached and provided support too, even to competition. And you can generally confirm that. And no, we didn’t approach Nomba for equity financing.”

Founded in 2020 by Akindolu, Brass was generally loved by its customers until withdrawal delays began around October 2023, three people said.

“I could not pay my staff in Nigeria last month, and I also had to pause my building project because I could not buy materials,” said Samuel, a Brass user who claimed he could not transfer funds for over a month. TechCabal saw screenshots of his failed transactions. 

“I have over 10 million naira there and can’t even use my money.” 

Mercy, another Brass user, shared similar complaints after she tried to withdraw money from her account in December.

“When I contacted Brass [about the transfer issues], I always got the same response: “We’re working on it.“ She was eventually able to make withdrawals. 

Despite the widespread nature of these complaints—there have been social media callouts of the CEO—Akindolu insists that only 80 businesses have experienced these delays. “Once escalated, the resolution does not take over 24 hours,” Akindolu claimed. 

The company also says that it is working hard to resolve the issues. 

Resolving customer complaints

In February, Brass created a second Telegram channel to resolve user complaints, and screenshots showed that while customer complaints were acknowledged, they remained unsolved for weeks.  

The startup also changed the phone number of its customer care hotline several times without sharing it on social media. It forced users to share their complaints on X and Instagram, with at least several people sharing their frustration at the company’s poor communication. 

Akindolu disputes that characterisation. 

“I am very accessible. Customers even call me on my phone number to relay their complaints, and I attend to them as soon as possible,” Akindolu said.

Staff cuts at Brass

On Monday morning, Akindolu shared in a thread on X that Brass would furlough an undisclosed number of employees to cut costs. Impacted employees will continue to access “health insurance coverage and other benefits until we are able to bring them back in the following months,” Akindolu tweeted. 

“[Akindolu’s] communication with us on the matter was limited to the scope of the post he made online, an employee told TechCabal.

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Partech’s close comes as funding for Africa fell by 36% last year, and more than half of investors pulled back on funding African startups. The close comes a year after Partech hit its first close at $263 million and the new funding comes from US and Middle East pension funds, sovereign funds, and new “strategic investors” like Africa Reinsurance Corporation and Dubai Future District Fund (DFDF). 

“We are grateful for the support and commitment of our investors: almost all Fund I investors reinvested, and some more than doubled their commitment. We are also honored to get support from a new set of strategic investors from the US, the Middle East and Africa, and for some of whom, this marks their first commitment in African tech,” said Cyril Collon, General Partner at Partech.

Partech, one of the most active African venture stage investors last year, invested in startups like Wave, Yoco and Vendease in its first fund and has now invested in three startups, including Revio, a payment startup in South Africa and two other undisclosed startups in Egypt and Senegal with its second fund. 

Partech will also open a new office in Lagos, home to a third of its portfolio, as it expands its team and base in Africa. “With our presence in Dakar, Nairobi, Dubai and now Lagos, we are strengthening our support on the ground for entrepreneurs,” said Tidjane Deme, general partner at Partech.

*This is a developing story