ABA Editorial · Jan 15, 2026 · 3 min read
The Central Bank of Nigeria has upgraded Kuda Microfinance Bank to a full national operating banking license, placing the Nigeria's most visible neobank in the same regulatory category as the country's commercial banks for key purposes.
The Central Bank of Nigeria has upgraded Kuda Microfinance Bank to a full national operating banking license, the latest step in Kuda's transition from fintech startup to regulated financial institution. The upgrade follows the grant of a national microfinance banking license in December 2025 and allows Kuda to operate under a regulatory framework comparable to Nigeria's commercial banks for key retail banking purposes.
Kuda was founded in 2017 as Kudimoney by Babs Ogundeyi, a former PwC engagement manager and former Special Adviser on Finance to the Governor of Oyo State, and Musty Mustapha, a software developer. The company rebranded to Kuda and received its first microfinance banking license from the Central Bank of Nigeria in 2019. The Kuda app launched in August 2019 offering Nigerians zero-fee banking services and a free debit card.
The upgrade to national operating status brings additional obligations alongside the expanded operating scope. Kuda will now need to maintain stricter compliance infrastructure, higher capital adequacy, and physical touchpoints in key Nigerian cities. The company is expected to strengthen internal controls around know-your-customer and anti-money-laundering processes and expand its senior compliance and risk management staffing.
Kuda has over 7 million customers in Nigeria and has raised approximately USD 91.5 million across multiple funding rounds, including a USD 55 million Series B round in August 2021 at a USD 500 million valuation. The company styles itself as a money app for Africans and has previously acquired payment licenses in Tanzania and Canada to serve African diaspora communities in those markets.
The national banking upgrade places Kuda in a specific category of African neobanks that have completed the transition from fintech-branded challenger to fully regulated financial institution. The pattern mirrors similar transitions undertaken by Moniepoint, which acquired a microfinance bank license and reached unicorn status as a full banking platform, and by several smaller Nigerian neobanks that have chosen formal regulatory standing over indefinite operation in adjacent categories.
Industry analysts note that the upgrade positions Kuda to compete more directly with commercial banks for Nigerian deposits, payment processing, and credit products, while also exposing the company to the cost pressures of full banking compliance. Whether the expanded regulatory scope translates to sustainable profitability at Kuda's current customer scale is one of the questions the company will need to answer over the next two to three years.