According to a report last year in tech industry bible, TechCrunch, Templars Client, KudaBank “is the first digital-only bank in Nigeria with a standalone license”, fast forward this year and we helped another client, Sparkle, who describe themselves as “An all new financial experience and premium lifestyle enabler” obtain their Micro Finance Banking License from the Central Bank of Nigeria.

Earlier this year, the CBN issued the Guidelines for the Regulation and Supervision of Microfinance Banks (the “Guidelines”). These Guidelines, which came into force on the 1st of April 2020, will impact on the business operations of several Fintech startups that leverage on the microfinance banking license to provide digital banking services due to the absence of a specific licensing regime for digital banks.

Against this background, this article analyses the key licensing requirements under the Guidelines and highlight the extent of its impact on digital banking services.