11 Best Microfinance Banks In Nigeria

11 Best Microfinance Banks In Nigeria

Information from CBN’s official website reveals that Nigeria has at least 916 licensed microfinance banks, which sounds like a fair bit, but what do microfinance banks in Nigeria do exactly?


A microfinance bank offers services to microfinance clients, a section of the public that deals in little sums of money and would be otherwise unbanked. Examples of ideal clients for a microfinance bank in Nigeria include market women, low-income earners, and unemployed youth.

With so many microfinance banks available across the country, choosing one to patronize might seem unnecessarily more difficult than it should be, and that’s why we’re here to help. In this article, you’ll learn all a microfinance bank should be, guiding you to choose one for yourself. Also, we’ll show you 11 of the best microfinance banks in Nigeria to help you narrow down your options.


What’s a Microfinance Bank?

According to the CBN official website, a microfinance bank refers to any licensed company in the business of offering financial and non-financial services to microfinance clients. Some of their services include savings and deposits, loans, and domestic funds transfers.

Nigeria has three categories of microfinance banks: a unit MFB, a state MFB, and a national MFB. The unit microfinance bank can only operate in a single location with a minimum paid-up capital of N20 million, while the state microfinance bank can have branches across a state.

On the other hand, national microfinance banks can open branches anywhere in the country with the approval of the CBN, and they must have a minimum paid-up capital of N2 billion.

Microfinance Banks vs. Commercial Banks

It’s not uncommon for people to confuse the functions of microfinance and commercial banks, but what are the differences between these two exactly?


The most significant difference between a microfinance bank and a regular commercial bank is their customers. While the former serves low-income earners that typically deal in tiny sums of money, the latter serves the general public, focusing on high-income earners and medium or large enterprises.

The Central Bank of Nigeria expands on this distinction on its website, clarifying that microfinance banks have four target clients, including low-income households; unbanked and underserved people, especially among vulnerable groups like women, youths, and the physically challenged; and informal sector operators like micro-entrepreneurs and subsistence farmers.

However, some microfinance banks in Nigeria are transcending these artificial client guidelines, serving clients that typically would use a commercial deposit money bank. Examples of such microfinance banks include VFD MFB and Kuda Microfinance Bank.

In short, the line between commercial banks and microfinance banks in Nigeria is getting blurrier by the day, and the central bank may have to redefine the boundaries to make the differences between their functions more distinct.

Before then, however, it’s essential to note that the sole difference between MFBs and commercial DMBs in Nigeria is the target clients, and even that isn’t as distinct as you’d expect it to be.

11 Best Microfinance Banks In Nigeria

Best Microfinance Banks in Nigeria

1. Kuda Microfinance Bank

Kuda Microfinance Bank is an online-only bank that only spawned into existence a few years ago, and it has managed to climb over many commercial and microfinance banks in Nigeria over its short stay. Launched in 2016 as Kudimoney, the bank gained popularity among the unbanked youth with its now-defunct slogan: “the bank of the free,” referencing its fee-less operational model.

While the bank now charges customers for transactions like withdrawals and transfers, it hasn’t lost the gigantic customer base it built along the way, making it one of the top microfinance banks in Nigeria. You can create an account and bank with Kuda through its Android and iOS apps, available on the respective app stores.

2. LAPO Microfinance Bank

Unlike Kuda Bank, LAPO Microfinance Bank is old, dating back to the 1980s amid the Structural Adjustment Program of the General Ibrahim Babangida Administration. It’s a household name among market women and micro business owners nationwide because of its infamous microfinance loans.

Its mission to help less-privileged Nigerians meant it focused on microfinance loans instead of offering banking services like Kuda or VFD Microfinance Bank. While the loans were helpful, LAPO built an infamous reputation for its ruthless debt recovery strategies that set the pace for the influx of modern-day payday lenders in Nigeria.

Also Read: Best Loan Apps In Nigeria

3. AB Microfinance Bank

AB Microfinance Bank’s drive is similar to that of LAPO, but instead of focusing on individual customers, it focuses on micro and small enterprises. Businesses that bank with AB Microfinance Bank can access a variety of loans, including SME loans, housing loans, and microloans.

However, accessing loans isn’t the only service available at AB; customers can also open bank accounts, deposit money, and access general banking services. Headquartered in Lagos, this bank may not be ancient, but it’s surely one of the best microfinance banks in Nigeria.

4. NIRSAL Microfinance Bank

Beneficiaries of any of the loans of the Buhari government should know NIRSAL Microfinance Bank, as creating an account with them is typically one of the steps required to access any such loans. The bank only opened shop in 2019, and its popularity is primarily due to it being an intervention bank; in other words, a channel for CBN to lend money to qualified Nigerian citizens.

Outside its relationship with Nigeria’s apex bank, NIRSAL Microfinance Bank is a proper national MFB with 115 branches across the 36 states of the country. It offers all the functions of a typical microfinance bank, including banking services and microloans. With its current standing, NIRSAL Microfinance Bank is undoubtedly one of the best microfinance banks in Nigeria.

5. Assets Microfinance Bank

Like NIRSAL, Assets MFB is another central bank intervention bank for providing personal and business loans to qualified Nigerians. It’s also relatively new, and despite being established by the Central Bank of Nigeria, it’s not run or managed by the apex bank, according to information on its official website.

The primary functions of Assets MFB include providing business, personal, and payday loans to Nigerians, but that’s not all they do. The bank also enables customers to create savings and current accounts for money deposits and investments.

6. ACCION Microfinance Bank

ACCION Microfinance Bank is more like LAPO than Kuda, with a mission to empower micro-enterprises and low-income earners with loan services. The bank promises to go about its business in a sustainable, ethical, and profitable manner, as per its website. So we can hope for something better than LAPO’s infamous debt collectors.

The company has several loan options for clients, including home loans, education loans, and small business loans. With stress-free quick loans and a legion of other services, ACCION Microfinance Bank is easily among the best microfinance banks in Nigeria.

7. VFD Microfinance Bank

VFD Microfinance Bank, popularly known as VBank, is very similar to Kuda Bank in its operational model, but it’s a bit older and more established. The bank is a subsidiary of VFD Group, which isn’t a bank in and of itself, but its flagship business holding has undoubtedly made it a financial institution.

Following the successes of Kuda Bank, VFD Microfinance Bank restructured its business for a better digital presence to attract more online users. Thanks to the reforms, VFD became a better digital bank overall, sealing its place among the best microfinance banks in Nigeria.

8. BoI Microfinance Bank

BoI stands for Bank of Industry, and BoI Microfinance Bank is its subsidiary for microfinance clients. While the Bank of Industry targets big businesses and firms, its microfinance division focuses on microfinance users like micro and small enterprises and low-income earners.

Like its parent bank, BoI MFB’s mission is to encourage entrepreneurship, making it only natural that the bank focuses on small business loans to its clients. In addition, it offers saving deposit services for small businesses like most of its competitors. With its size and the Bank of Industry backing, BoI Microfinance Bank is undoubtedly one of the best microfinance banks in Nigeria.

9. Fina Trust Microfinance Bank

Like most other microfinance banks in Nigeria, Fina Trust MFB offers a wide range of services, from individual and business account creation to loans. However, glancing at the bank’s website will reveal they focus on lending easily accessible loans to customers.

Fina Trust MFB has a wide variety of loans, including SME loans, auto loans, educational loans, salary advances, you name it. The bank has apps for Android and iOS for digital accessibility, but you can stick with its online banking portal if that works better for you.

10. Sparkle Microfinance Bank

Sparkle Microfinance Bank works like Kuda and VFD: registering as a microfinance bank but primarily focusing on the services of a traditional commercial bank. It’s relatively small and nowhere near the popularity of either Kuda Bank or VFD MFB, but it has established itself as an excellent microfinance bank in Nigeria.

The bank has apps for both Android and iOS to allow users to create and manage their accounts without having to visit a physical location. Users can access a legion of banking services through the app, including loans and account creation.

11. Mutual Trust Microfinance Bank

Mutual Trust MFB was formerly Mark de Rock Microfinance Ltd but went on a recapitalization that saw a management and name change that charted a new roadmap for the company. Now, Mutual Trust boasts hundreds of thousands of customers with innovative services catering to all categories of microfinance customers.

Its most popular service is arguably the 10-hour prompt loans that are self-explanatory. According to the company’s website, they’ll analyze, approve, and disburse your loan amount within 10 hours, hence the name. Since the redesign, it wouldn’t be a stretch to describe Mutual Trust as one of the best microfinance banks in Nigeria.


Is OPay under microfinance banks in Nigeria?

With Kuda Bank and VFD making this list, it’s only natural to ask if OPay is also a microfinance bank, and that’s partly the case. While the OPay brand itself doesn’t represent an MFB, most of its services are facilitated by Blue Ridge MFB, a microfinance bank licensed by the CBN to operate in Nigeria.

Which microfinance bank is the best in Nigeria?

The answer to this depends on what you want from a microfinance bank. If you’re after day-to-day banking activities, Kuda Bank works excellently; LAPO and ACCION are great for microloans; while NIRSAL and Assets are the best for microfinance banks in Nigeria for FG interventions. Before choosing any, it’s essential to weigh their pros and cons against your requirements.


The line between commercial and microfinance banks in Nigeria might be very blurry, but it’s still there. With over 900 active MFBs in the country, finding decent ones is no easy task, but we’ve done it for you. This article lists 11 of the best microfinance banks in Nigeria that work in any scenario.

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