ABA Editorial Board · Sep 2, 2026 · 8 min read
Kuda is now a nationally licensed Nigerian bank. FairMoney is a licensed microfinance bank with current accounts, savings, POS merchant solutions and NGN 150 billion in disbursed loans. TymeBank is profitable, valued at USD 1.5 billion, and expanding into Indonesia and Hong Kong. These are not neobanks. They are banks. The category name we have been using for five years is now misleading, and we argue here that continuing to use it obscures what is actually happening in African consumer banking.
In January 2026, the Central Bank of Nigeria upgraded Kuda Bank's operating license to full national banking status. Kuda is now, formally and operationally, a Nigerian commercial bank. FairMoney, officially registered as MyCredit Investments Limited, has been a licensed microfinance bank for some time, offering current accounts, fixed-term deposits, high-interest savings, debit cards, and merchant POS solutions, and has disbursed over NGN 150 billion in loans to its customers. TymeBank reached profitability in December 2023, closed a USD 250 million Series D led by Nubank at a USD 1.5 billion valuation, and is now operating retail banking in South Africa while actively expanding into Indonesia and Hong Kong. We argue here that calling these companies "neobanks" is no longer accurate, no longer useful, and actively obscures the more important story of what is happening to African consumer banking.
When the neobank label was coined, it described digital-first consumer financial services companies that existed in the regulatory grey area between a traditional bank and a fintech. The implied proposition was that neobanks were disruptors, that they would eat the lunch of incumbent banks, and that the category would either collapse or graduate into full banks within a few years. Veterans of the European neobank wave will remember that the prediction was broadly accurate. Revolut, N26, and Monzo are now licensed banks in most of their home markets. The neobank category was always transitional.
Africa's largest neobanks have now completed that same transition. Kuda has the license. FairMoney has the license. TymeBank has been a licensed South African bank since its founding, and its group parent now holds banking operations across multiple jurisdictions. Carbon has been profitable and is pursuing similar regulatory upgrades. The companies we have been calling neobanks are, in 2026, simply banks that happened to start as digital-first consumer products.
Practitioners in the Lagos fintech community have noticed this shift and have been quietly adjusting their language. Senior executives at several of the largest Nigerian digital financial services companies now describe themselves as "digital banks" or simply "banks" rather than "neobanks" when speaking to regulators, investors, and corporate partners. The word "neobank" increasingly sounds like a marketing label from an earlier era. The shift in self-description tracks the shift in reality.
A neobank, in the original conception, competed against incumbent banks by being faster, cheaper, and easier to use. That competitive posture made sense when the neobank had no banking license, limited balance sheet, and no regulatory obligations beyond consumer protection rules. A licensed bank competes differently. It has capital requirements to meet, regulatory reporting to produce, Basel-adjacent supervision to navigate, and the same obligations around deposit insurance, AML, and liquidity that every other licensed bank faces. The competitive advantage is no longer regulatory arbitrage. It is operational execution.
This changes almost everything about how these companies should be evaluated. Investors who valued African neobanks at venture-capital multiples based on user growth and market share were pricing a disruption story. Investors pricing the same companies in 2026 should be using emerging market bank valuation frameworks: book value, return on equity, net interest margin, non-performing loan ratios, cost-to-income ratios. The two frameworks produce very different answers, which is part of why several African neobanks have found their fundraising cycles more difficult since 2023. The valuation paradigm was changing underneath them.
Senior analysts covering African financial services tell us that the mental shift from "Africa's neobank category is hot" to "Africa now has a small number of growing digital-native emerging market banks" is a more accurate description of what is happening commercially. It is also less exciting to pitch, which is why it has taken longer to land in the mainstream fintech press than it should have.
If we keep calling Kuda, FairMoney, TymeBank, and Carbon neobanks, we miss the more important observation: African banking is now consolidating into a small number of large, technology-forward institutions that combine traditional banking assets with digital-native operating models. Some of these institutions started as neobanks and graduated upward. Others started as traditional banks and invested heavily in technology modernization. Equity Bank in Kenya, Ecobank Group across 33 countries, MNT-Halan in Egypt (which now holds investment-grade corporate bond ratings from S&P and Moody's), and the big four South African banks all fit some version of this description.
The important story is not "which neobanks will replace which traditional banks." It is "which institutions will be the dominant African retail banks in 2030, what will they look like, and what combination of legacy banking DNA and digital-native DNA will they embody." Some of those winners started digital. Some started traditional. The line between the two categories has blurred to the point where it is no longer the most useful way to segment the market.
We suggest retiring "neobank" as a category for African consumer financial services in 2026 and beyond. In its place, we propose three more accurate categories: "digital-native banks" for institutions like Kuda, FairMoney, Carbon, and TymeBank that started as fintechs and have now graduated into full banking licenses; "technology-forward traditional banks" for institutions like Equity Bank, Ecobank, and the South African big four that started as commercial banks and have invested aggressively in digital infrastructure; and "super apps" for institutions like MNT-Halan, OPay, and PalmPay that combine banking-adjacent services with broader consumer platforms. These categories overlap. The categories can evolve. What matters is that they describe what is actually happening, rather than what was happening in 2019 when the neobank label still fit.
Language matters in finance because categories drive valuation, regulation, and investor expectations. Carrying an obsolete label forward into a market that has moved on from it is not a harmless simplification. It produces worse analysis, worse investment decisions, and worse regulatory conversations. African fintech has earned the right to more precise language. Let us start using it.