Africa’s payments giant Flutterwave has received regulatory approval in Nigeria, where its operational headquarters are located, to operate a microfinance unit.

The move will enable it to branch out into lending and holding deposits on behalf of customers.

Those services were previously outside the domain of the fintech powerhouse, which has built a reputation in payments, cross-border money transfers, switching, and card processing over 10 years of operation.

“This milestone allows us to make our infrastructure more efficient and deliver faster, more reliable financial services,” Olugbenga Agboola, founder and CEO, said in a statement on Thursday.

“By operating directly within the financial system, we can streamline money movement, accelerate settlement for merchants, and build products that support sustainable long-term growth,” he stated further.

The permit opens the door for Flutterwave to directly access national clearing and settlement systems and streamline transaction processing without relying on commercial banks, as was the case before.

It now has greater flexibility to oversee the flow of funds across its platform and to earn more value by handling transactions independently.

Flutterwave, Africa’s most valuable startup, will face immediate rivalry from Moniepoint, which attained unicorn status in October 2024, and PalmPay, named by the Financial Times as Africa’s second fastest-growing company in 2025.

Moniepoint only days ago acquired Nairobi-based cloud-based restaurant management platform Orda Africa and a 78 per cent stake in Kenya’s Sumac Microfinance Bank.

Neobank revolution

Traditional banks in Africa’s most populous country, still held back by legacy banking bottlenecks, are fast losing the consumer banking space to digital banks, which are leveraging technological edge and innovation to disrupt banking operations while winning over millions of underserved Nigerians without access to financial services.

Moniepoint, for instance, processes 26 million payments daily with 10 million plus users on its clientele, while PalmPay, as of last July, was already handling 15 million transactions every day with 35 million users signed on to its platform, according to both companies’ websites.

Competition has grown even fiercer in recent years after big telcos like MTN Nigeria and Airtel set up payments units, MoMo PSB and SmartCash, respectively, to gain a slice of the multi-trillion naira market.

Unlike in the past, when cash drove communal nightlife across the country, digital transactions now power that segment of Nigeria’s informal economy.

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A report by Moniepoint released in February and titled, “A Case Study on the Business of Community Nightlife in Nigeria”, revealed that over 27,000 clubs, bars and lounges processed three transactions per second across its network.

Flutterwave’s planned initial public offering, in the works for years now, received a boost this January after the firm bought Mono Technologies Nigeria Limited, a pioneer in open banking infrastructure in Africa.

The company expects Mono’s “Plaid-like” infrastructure to strengthen its prospects of transitioning into a full-stack financial data and infrastructure company, a precondition to listing on the Nigerian Exchange and NASDAQ.