Why Nigerian fintechs use MFB partnerships instead of full licences

Getting a full CBN licence is the dream — until you look at what it actually takes. A Microfinance Bank licence requires a minimum share capital of ₦200M (for unit MFBs) to ₦5B+ (for national MFBs), a board with fit-and-proper directors, a physical head office, and an application process that routinely runs 18–24 months.

For most Nigerian product teams, that's not a starting point. It's a destination.

So how are hundreds of Nigerian fintechs legally offering wallets, transfers, and savings products right now, without their own CBN licence?

The agency and partnership model

CBN regulations allow licensed financial institutions — banks, MFBs, payment service banks — to offer their services through third-party technology platforms. The key document here is the CBN Guidelines on Agent Banking (2013, revised 2020) and the broader framework for banking as a service.

The structure works like this:

• The licensed institution (an MFB or bank) holds the CBN licence, holds user funds, and is responsible for regulatory compliance.
• The technology partner (you) builds the user-facing product, handles onboarding UX, and accesses the institution's infrastructure via API.
• The end user has an account at the licensed institution — not at your company. Your company is the distribution channel.

This is not a loophole. It is the intended framework. CBN has explicitly encouraged this model to expand financial inclusion without requiring every startup to go through a full licencing process.

What this means in practice

When a user creates a wallet in your app powered by PayKore:

1. Their account is legally an account at our MFB partner, issued under the MFB's CBN licence.
2. The NUBAN they receive is a real bank account number registered to that MFB.
3. Their funds are held in a pooled omnibus account at the MFB, sub-ledgered per user by PayKore's double-entry system.
4. KYC (BVN/NIN verification) is performed to CBN wallet tier standards — Tier 1, 2, or 3 — and the MFB is responsible for compliance.

Your company is the technology and distribution layer. You are not holding funds, issuing accounts, or performing regulated financial activities. You are building a product that sits on top of a regulated institution.

What you do need

Before going live with any PayKore integration, you'll complete our KYB (Know Your Business) process:

• CAC registration (your company must be legally registered in Nigeria)
• Director BVN verification
• Review and acceptance of the PayKore partner agreement and the underlying MFB's terms
• A basic AML policy for your platform

This process takes days, not months. And it costs nothing beyond the time to gather documents.

The limits of this model

The partnership model is not unlimited. There are things you cannot do under a technology partnership that require your own licence:

• Issue your own branded debit cards linked to your own BIN (requires a switching licence or a separate card-issuer agreement)
• Hold your own float and earn interest on it without sharing with the MFB (requires your own licence or a negotiated rev-share)
• Offer foreign currency accounts or cross-border transfers (requires additional CBN approvals)
• Operate as a Payment Service Bank with ATM access (requires a PSB licence: ₦5B capital)

For most products — marketplaces, SaaS platforms, HR tools, savings apps, lending products — the partnership model covers everything you need to launch and grow.

The bottom line

If you're a Nigerian product team that wants to offer wallets, transfers, or payment collection to your users, you do not need a CBN licence to start. You need a partnership with a licensed institution, documented compliance policies, and a product built on the right infrastructure.

That's exactly what PayKore provides.