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.

The company also said that the board will soon announce the appointment of an acting Group CEO who is expected to build on the “legacy of growth and operational excellence.” 

“The Access family has suffered a major loss with the passing of Dr. Wigwe who was a great friend and fine gentleman. He had a prodigious intellect, admirable personal qualities, and vast business experience which he brought to bear on the Access Family and for which we owe him a debt of gratitude,” said Abubakar Jimoh, chairman of Access Holdings in a statement.

The helicopter carrying Wigwe and the other passengers was identified as a Eurocopter EC130 by the U.S. Federal Aviation Administration.

The aircraft was headed to Las Vegas when it crashed near a border city between Nevada and California on Friday night, as per reports.

The 57-year-old CEO was a key figure in the transformation of Access Bank to a holding company and the largest bank in Nigeria by total assets. The bank is also one of the largest retail banks in sub-Saharan Africa with over 60 million customers in 20 countries. 

Apart from the banking sector, Herbert Wigwe was also invested in education with his latest project being a university named after him and located in Rivers State. 

The value of those transactions was over $150 billion. It represents a 205% increase from 2022, when the startup processed 1.7 billion transactions worth over $100 billion.

Moniepoint’s numbers are impressive compared to the transactions NIBSS — operator of Nigeria’s real-time payment infrastructure — handled in 2023. According to data seen by TechCabal, NIBSS processed 9.6 billion transactions, which were worth ₦600 trillion.

Moniepoint’s numbers (5.2 billion) represent almost half of the transactions NIBSS processed, emphasising how 2023 was Nigeria’s best year for digital payments since 2020.

However, looking eastward, Moniepoint’s transaction volume is dwarfed by MPesa, Kenya’s largest payment processor. The Kenyan payment giant processed 12.93 billion transactions from April to September 2023, more than double Moniepoint’s 2023 numbers. This might explain why Moniepoint is expanding to Kenya.

Moniepoint: From a small startup to a payment behemoth

Moniepoint has grown from a little-known banking software development company that developed products for Nigerian banks to a payment behemoth. The startup says it currently has more than 2 million business accounts on its platform.

In August 2023, Moniepoint ventured into the personal banking space. At the time, Ope Adeyemi, Moniepoint’s senior vice president for channels and sales tools, told TechCabal that the fintech had 800,000 POS terminals actively used daily nationwide. 

The startup currently runs its ubiquitous agency banking product, Moniepoint, an online payment gateway Monnify, and its personal banking product. Through these products, users can pay for bills and airtime, transfer money to bank accounts or POS devices, and pay with cards. Business owners can also manage their businesses with the startup’s features, like tax management, compliance, payroll and expense management, and receiving loans. 

Moniepoint’s business customers are in different sectors. The majority of their business users come from the retail sector (38.29%), food and drinks (17.77%), oil and gas (9.11%), IT and electronics (6.12%), beauty and personal care (4.5%), and agriculture (4%). 

Moniepoint’s bird-eye view

When you process these many transactions daily, you can get a birds-eye view of how Nigerians move money daily.

Sundays are the peak time for food purchases in Nigeria, typically between 7-8 p.m., according to company data seen by TechCabal. Nigerians also bought ₦100 worth of airtime 63 million times, making it the most popular amount for airtime transactions. 

Nigerian election periods are usually mired with violence, and 2023 was no exception. The fear of this violence leads Nigerians to stock up on food and other provisions. According to Moniepoint, this also extends to bill payments. The day before Nigeria’s 2023 general elections, it processed the highest bill payments for cable and electricity subscriptions in an hour.

Oxygen X is not entirely a new product for the Access Corporation, having originally been named Quickbucks. The Quickbucks app has a 2.6-star rating on Android’s Playstore and was originally launched two years ago. 

“The Quickbucks app has about 7 million customers, and that is what they are trying to migrate to Oxygen,” one person with knowledge of the business said. “FairMoney and Opay lend to everyone, but banks want you to be their customer before lending to you.” 

A standalone lending app means that Oxygen can acquire users who don’t have Access Bank accounts.

While other holding companies in the financial services space have focused on fintech plays (GTCO has Squad, Stanbic has Zest, and Access has Hydrogen), Access Corporation has become the first to make a play for standalone digital lending. 

Oxygen will compete with digital lenders like Carbon and OPay, serving a growing mass of digital-first customers. Since moving to a holding company structure in 2020, the Access Corporation has made big bets, including the launch of Hydrogen and a rapid expansion across the continent. 

“We want to be present in 22 countries over the next five years,” Herbert Wigwe, Access Corporation’s CEO, said in a Bloomberg interview. Since then, the banking subsidiary has acquired several banks to deepen its global reach. 

In November 2023, Access Bank said it was expanding to Asia, joining the likes of South Africa’s bank TymeBank to open shop in Asia. Early this month, the bank acquired Megatech Insurance Brokers Ltd, an insurance brokerage company licensed and regulated by the National Insurance Commission.

The rule change, made by Nigeria’s Central Bank, comes after several high-profile fraud incidents raised concerns about existing Know Your Customer (KYC) processes. Still, industry experts believe it will not solve what is now described as a “fraud pandemic.” 

“There is no silver bullet for solving fraud, but the new move can help us to identify bad actors faster,” said Babatunde Akin-Moses, CEO of Sycamore, a Nigerian lending platform. Other industry players share similar views.

“The accounts used to perpetuate fraud have always had BVN and NIN,” said Adedeji Olowe, a financial industry veteran and founder of Lendsqr. Instead, he framed the problem as a “lack of rules and regulations to stop fraud”. 

Nevertheless, Olowe said the rules are welcome and wonders “why it hadn’t been done since”. Like many banking industry experts, Olowe believes neobanks will be most affected by the new rules. 

While deposit money banks offer Tier-1 accounts—bank accounts that usually require no identification—neobanks like OPay and Palmpay may have popularised these easy-to-open accounts using the narrative of aiding financial inclusion. It has allowed them to onboard customers with little friction or without a need for national identity cards, which only 30% of Nigerians have. 

Yet, industry experts have criticised these lax KYC measures. In October, TechCabal reported that Fidelity Bank, a Nigerian commercial bank that holds ₦3.1 trillion ($3.9 billion) in consumer deposits, blocked several neobanks over concerns that neobank wallets and accounts are an easy way to move monies that had been fraudulently obtained. Another major bank held similar internal discussions, TechCabal reported at the time. 

The new directive is part of efforts to promote financial system stability and strengthen the Know Your Customer procedures in all financial institutions, said Nigeria’s Central Bank. 

Moniepoint, a Nigerian fintech that provides banking services to businesses, is now venturing into the retail banking space. A retail banking focus will put it in competition with OPay and PalmPay. With a new app, users will be able to make transfers, pay bills, and buy airtime, while its debit cards, issued through Mastercard and Verve, can be used at ATMs, POS terminals, and online.

The company also says it will introduce a first-of-its-kind automated dispute resolution system that will enable users to log disputes for failed card transactions and track them until they get a full reversal within 48 hours. This is in line with the CBN’s guidelines on chargebacks, which mandate a 48-hour reversal period.

Ope Adeyemi, Moniepoint’s senior vice president for channels and sales tools, told TechCabal that the fintech saw an opportunity to make things better. “We currently have 800,000 terminals actively used daily across the country, and assuming there are 120 million adults in Nigeria, the ratio is 150:1. We can leverage this to make payments and banking better.”

Adeyemi also added that with Moniepoint’s banking app, the company would be able to bring reliability to payments. “We still have to rely on other banks to complete payments, but the idea here is to improve the reliability of making payments and banking by ensuring that the process of making payments starts with the customer on Moniepoint and ends with the merchants on Moniepoint as well; that way we can literally almost guarantee 100% success rates,” he said.

For an 8-year-old payments company, Moniepoint could have launched a personal banking product earlier, but Adeyemi shared that the company chose now because “[Moniepoint] are positioned to do it right.” He added that the company had designed its personal banking app to be as reliable as possible and added features such as salary advances. The app would also contain all the sensitive information on a customer’s debit card instead of being on the card. Adeyemi also added that a play at remittances would come later for both its business customers and its personal bank customers.

Last week, the Central Bank of Nigeria (CBN) introduced the Customer Due Diligence Regulation 2023. According to the new regulations, banks will now collect customers’ social media handles as part of the Know Your Customer (KYC) process. However, several banks told TechCabal that they are waiting on further clarification from the CBN before they begin to implement the guidelines. 

While some banks said that they are waiting on an official memo from the regulator, others said that they are currently deliberating on how to implement the new regulation.  “There has to be a stakeholder engagement between the bank and the customers, then a memo would be issued out to compliance officers in regions on implementation steps,” a Fidelity bank personnel told TechCabal.

Concerns about the rules mandating identification on social media

Per the regulation, the CBN requires social media handles as means of identification but also requires institutions to monitor customers’ online activities, in certain cases, especially if a substantial portion of their business is conducted online. This has been received poorly by many Nigerians who have cited privacy, concerns.  Yanuza, a Twitter user said, “We cannot watch silently as CBN goes after the very core of our digital rights which is our privacy by harvesting and linking our social media footprints to our accounts.” The Socio-Economic Rights and Accountability Project (SERAP) has also threatened to sue the CBN.

Questions have also arisen regarding the reliability of individuals’ online personas as reliable data for financial institutions. While social media activity is increasingly acknowledged in legal proceedings, users can create fake profiles, manipulate images, impersonate others, and make false claims about their financial status. Moreover, fraudulent businesses operate on social media, posing as legitimate entities. However, the CBN thinks that financial institutions can better assess the customers for potential risks associated with money laundering, and terrorism financing.

Moreover, the new requirements do not take into account Nigeria’s low internet penetration which makes social media platforms a luxury for many, unlike the previous one. 

In 2009, the CBN published anti-money laundering regulations that detailed KYC requirements but recognized that many individuals lacked formal means of identification due to financial constraints. To avoid inadvertently excluding the poor, in January 2013, the apex bank introduced a three-tiered KYC requirement that provided flexible opening requirements for low-value and medium-value account holders, with increasing requirements as transaction amounts escalated. 

This three-tiered KYC requirement is also referenced in the new regulation, albeit briefly. In Section 16 (2), the regulation states, “Financial institutions shall comply with Tiered KYC measures as stipulated in the CBN circulars on TKYC [tiered KYC] and the CBN AML, CFT and CPF Regulations.”  

However, it remains to be seen how the banks and financial institutions will comply with the new regulations. Previous circulars permit them to create internal processes for verifying the identities of customers who are genuinely unable to meet certain identification requirements. This new regulation does so too but mandates that such policies be brought for approval before implementation.

So it is possible that just as email address— the only internet-based identity required then—was optional for lower tier bank accounts, the social media handles might also be an optional KYC requirement for customers of low socio-economic status who would otherwise be excluded from financial services.

Heritage Bank has denied reports alleging that a member of its information technology team diverted ₦49billion and disappeared. “The allegations are wrong and defamatory. These articles have used unrelated facts and conjecture to create a fictitious narrative, “the bank told TechCabal in a statement yesterday forwarded by Ozena Utulu, its corporate communication manager.

The bank said it has embarked on long-term sustainability plans premised on restructuring the bank, ensuring cost efficiency, and management of its assets, and confirmed reports that it had reduced its workforce. However, it stressed that the staff affected had been duly compensated. 

Despite these claims, customers banking with Heritage still struggle with poor customer service, delayed transfers, inability to move depositor funds and failure of the bank’s apps. Two customers confirmed this to TechCabal. A banking customer known as Isaac told TechCabal that he had been unable to withdraw his funds from Heritage Bank for the last seven days. “I have money in my account. I have been unable to withdraw it for days. I tried more than 20 times. I will have to visit the bank on Monday to remove my money,” he said.

Esther Onwubuya, another Heritage Bank customer, told TechCabal that the bank has been experiencing network issues that have made it difficult for her to withdraw money. “I don’t know if this has anything to do with the rumors. It’s always a hassle to send funds. Last month, we even had to go to the bank.”

And while Heritage bank however said in its statement that it’s committed to collectively driving growth and delivering exceptional service to all, Onwubuya is unmoved. “I saw the statement, but it doesn’t take away from what’s currently happening. I even hear that the ATM services are poor too.”

Three weeks after the digital bank Eyowo lost its microfinance  bank (MFB) licence, it restored interbank transfer on its platform through a partnership with Providus Bank. Due to the loss of its MFB licence, the startup now relies on Providus for banking services while it will continue to leverage its PSSP licence to process payment for its users. This development has redefined Eyowo’s vision for its future which may now entail partnering with more commercial banks like Providus, but that may weigh heavily on Eyowo’s goal of financial inclusion.

Eyowo users now have a Providus bank account in addition to their Eyowo bank account, and the startup is gunning to enable similar partnerships with other banks.  In a tweet, the company said, “Our long-term vision is now to create a space where accounts from other banks can be connected, enabling a comprehensive financial life management within Eyowo.”  Speaking to TechCabal, an Eyowo spokesperson said that even though it all started out with the loss of their MFB license, this development has caused them to accelerate their plans of making  Eyowo a financial hub. “Having other banks plugged into our platform has been a part of our plan, as we want to help our users manage and grow their finances in one place. This way, Eyowo users can have access to analytics of their spending, and other information that can improve their finances and enable them to grow,” he said on a call with TechCabal.

Now you need a bank to use a digital bank

Even though, thankfully, customers have regained access to their funds, this current partnership with Providus Bank means that Eyowo customers must have a BVN to make interbank transfers. To have a BVN one needs to have already had an account in a traditional bank. 

Eyowo categorises its accounts into four tiers based on levels of customer identification (KYC). These tiers are referred to as Tier 0, Tier 1, Tier 2, and Tier 3. Currently, the company has connected all its Tier 2 and Tier 3 users to new Providus bank accounts, and it seems to be because these tiers meet the  KYC requirements of traditional banks like Providus. Tier 1 customers currently can’t perform interbank transfers but according to the company’s tweet, they will be able to once they upgrade to tier 2 by verifying their ID with their biometric verification number (BVN). 

This is a contrast to weeks ago when with just a phone number, anyone could create an account on Eyowo to receive and transfer money to any other Nigerian bank. When the digital bank launched in 2019, former CEO, Tomi Amao, said the company was aiming to reduce the population of the unbanked in the country as Eyowo’s banking services is accessible via any smart or feature phone through a USSD code: *4255#. Months later, co-CEO Yomi Adedeji tweeted, “We have created a bank [Eyowo] on a phone number that enables everyone to access financial services irrespective of who they are and what they have.” But with these changes, people need to have a bank to use the digital bank.

Eyowo understands what these changes mean to people who are unable to own accounts in traditional banks. Speaking to TechCabal, a spokesperson said, “Solving for the financially excluded is still a part of our plans at Eyowo. As time goes on we will extend the reach of our services beyond current obstacles to as many as we can. However, the circumstances require that we focus on serving as many customers who have trusted us now. Every other thing that they love about Eyowo still exists, and these new developments are actually progress for many of our customers. ”

He told TechCabal that right now, Eyowo is focused on using its Payment and Switching Service Provider (PSSP) license to become a converging point for many commercial banks. “We are also going to quickly become a hub for our users to get real-time financial intelligence and insight as they transact so they make better financial choices,” he concluded.

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A note from independent auditors, KPMG, has raised questions over the financial health of Nigeria’s Unity Bank. These questions became pertinent after the lender’s total liabilities exceeded its total assets by ₦274.9 billion for the full-year ended December 31, 2022.

Per its financial statements, the bank recorded total assets of ₦510 billion in full-year 2022, compared to ₦538 billion in 2021. On the part of its total liabilities, the bank recorded ₦785 billion in 2022, as against ₦815 billion recorded in 2021. Analysts from KPMG wrote a note regarding this situation in its books, highlighted it as a “growing concern.”

“We draw attention to Note 35 of the financial statements, which indicates that the bank made a profit of ₦941.4million for the year ended 31 December 2022. As at same date, the bank’s total liabilities exceeded its total assets by ₦274.9billion and the bank did not meet the required minimum Capital Adequacy Ratio (CAR) of 10% and the minimum capital requirement of ₦25.00 billion for a national bank as required by the Central Bank of Nigeria (CBN). As stated in Note 35, these events or conditions, along with other matters as set forth in Note 35, indicate that a material uncertainty exists that may cast significant doubt about the bank’s ability to continue as a going concern,” the note in the financials read.

What Unity Bank’s 2022 financials say

For the year 2022, the bank’s interest income grew by 13% to ₦48.9 billion in 2022 from ₦43.1 billion in 2021 but its profit after tax (PAT) fell by 70% to ₦941.3 million in 2022. Directors of the bank admitted in their notes to the financial statements that the bank is nearing a recapitalisation and there is uncertainty regarding the process. Nonetheless, they said that they have reached an advanced stage with both local and multinational investors in the fund mobilisation for the bank. 

“The directors are confident that they would be able to recapitalise the bank upon the upturn of economic activities within the next one year. Based on this, the directors have a reasonable expectation that the bank will continue in operational existence for the foreseeable future and as such realise its assets and settle its liabilities in the normal course of business,” the notes to its 2022 financial statement read.

Managing Director, Unity Bank Plc, Mrs Tomi Somefun in a quote attributed to her said the bank is trying to build momentum while reflecting key performance indicators despite economic headwinds and volatilities that characterized the operating environment in the 2022 financial year. “There are highs and lows as we look at the gross earnings, with 13.7% growth, increase in liquid assets by 7.5% and deposits recording moderate growth of 1.6%, while maintaining steady growth in profitability,” the statement said.

More worries in Q1 2023 results

Despite those unimpressive 2022 results, the bank managed to make a comeback in its first quarter 2023 results. It recorded ₦1.04 billion profit in the first quarter of 2023, compared to ₦869.2 million in the corresponding period of 2022. Its gross income went up by 17% to ₦15.9 billion in Q1 2023. 

Despite these improvements, its total liabilities still surpass its total assets in Q1 2023, sustaining the questions over the bank’s financial health. The bank recorded total assets of ₦440 billion in Q1 2023, as against ₦510 billion in the corresponding period of 2022. Also, it recorded ₦580 billion as total liabilities in the first quarter of 2023, as compared to ₦785 billion recorded in Q1 2022. 

However, it forecast a profit after tax of ₦230 million for the second quarter of 2023 and gross earnings of ₦23.4 billion for the same period. In 2020, TechCabal reported that Unity Bank alongside TeamApt and Access Bank were victims of a data hack, which they all refused to admit.

High interest rate, inflation worry bank’s financial health

Unity Bank blamed the Nigerian business environment for some of the circumstances surrounding the bank, its head, external communications and media relations, Jonah Nwokpoku told TechCabal. “Last year was the first time the bank’s profit dropped. It is not that we are not making profit, it is just that it is not as good as it was in the previous year. Things change in an economy— The operating environment are not always the same and companies don’t come out of them the same way. These things affect profitability. If you look at the Nigerian economy and the continuous rise in interest rates, you realise the rising interest rates keeps customers away from creditors. You are dealing with a high inflationary environment and inconsistency in government policies that affect the economy generally. These issues affect the profitability of the bank,” he explained.

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