Nigeria’s Kuda Bank reportedly incurs N6 billion loss in 2021 – Nairametrics

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Nigerian Microfinance Bank Kuda Bank reported a loss of N6 billion more than 7x the N868 million loss it reported in 2020.
The company’s result was first reported by Techcabal a Nigerian-based news website focused on covering the tech sector in Africa. Nairametrics is yet to cite a copy of the financial statement.
Kuda Bank is a poster company for Nigeria’s burgeoning FinTech startups and has garnered widespread attention over its disruptive banking operations.
The bank styles itself as the “bank for the free” and does not charge its customers for transfers within the bank. Kuda Customers, however, get 25 free transfers to other banks every month. Extra transfers to other banks cost ₦10 each.
Some of these disruptive banking models have made it the darling of young Nigerians. However, this comes with a huge cost as the report clearly elucidates.
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Aggressive Lending: The company makes money by giving our micro-loans to retail borrowers, SMEs, farmers, and traders all classified as subprime and highly risky.
Aggressive Losses: As the company focused on aggressively growing its loan books so did defaults and higher operating costs.
A cursory review of the report from Techcabal suggests the bank’s aggressive loan growth strategy is the primary driver of losses.
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This is the first time Nigerians will have an insight into the financial statements of Startups like Kuda Bank which have raised millions of dollars in funding at very high valuations.
I also feel kuda should go public. And get listed on the NSE. That would be a good development for them.
This is a start up company in an aggressive growth phase. Losses at the early stage should not be a surprise but rather should be expected.

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© 2022 Nairametrics
© 2022 Nairametrics


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