2026 Microfinance Banking Industry Report

Overview of the Report

This report provides an overview of the Nigerian Microfinance Banking Industry, assessing recent performance, the operating environment and the sector’s near‑term outlook. Microfinance banks (MFBs) continue to play a critical role in promoting financial inclusion by extending credit, savings and payment services to low‑income households, micro‑entrepreneurs and small businesses that remain largely underserved by conventional deposit money banks.

According to data from the Central Bank of Nigeria (CBN), the Industry’s total assets rose by 39.3% year‑on‑year to ₦3.9 trillion as of 30 June 2025, from ₦2.8 trillion in the corresponding period of 2024. This expansion was largely driven by strong growth in customer deposits, underpinned by rapid adoption of digital payment channels and the continued build‑out of Point‑of‑Sale (POS) agent networks by technology‑driven operators. Agusto & Co. attributes the solid funding performance primarily to the growing dominance of fintech‑led microfinance banks – notably Moniepoint, Kuda, PalmPay and OPay Microfinance Banks – which mobilise substantial merchant settlement balances at relatively low funding costs, thereby strengthening the Industry’s deposit base.

Borrowings, which totalled ₦856 billion as at 30 June 2025, increased by 23.6% from the 2024 financial year‑end despite a high interest‑rate environment, providing additional support for asset growth. Funding was sourced from both local and international development finance institutions, as well as via bond issuances and commercial paper programmes. The stronger funding base enabled further expansion of the loan portfolio, which reached ₦1.4 trillion as of 30 June 2025 (36.3% of total assets), reflecting 34.2% year‑on‑year growth driven by increased digital lending and deeper penetration into underserved segments.

The report also reviews regulatory and competitive developments, including the CBN’s upgrade of five fintech‑led MFBs to national licences in January 2026 and the agent banking exclusivity directive effective April 2026, alongside persisting macroeconomic headwinds and structural risks that will shape the Industry’s trajectory.

We believe the information, analysis and opinions contained in this industry report would be useful to:

• Bankers and financiers who wish to assess the creditworthiness of Industry players
• Operators who wish to gain a better understanding of developments in the Industry
• Analysts, investors and other users who require a good understanding of the Industry