After issuing ₦237 billion in loans in 2024, LAPO Microfinance Bank (MFB) is set to launch a new banking app aimed at expanding its customer base beyond its traditional clientele of petty traders. With 35 years of experience as a microfinance institution, LAPO is now focusing on attracting younger Nigerians and diversifying its customer profile.
LAPO MFB New Banking App Features
The LAPO app, expected to launch in the first quarter of 2025, will offer a range of services, including:
- Loan Access: Users can take loans starting from ₦20,000.
- Bill Payments: Users will pay bills directly through the app.
- Daily Transactions: Conduct everyday banking activities.
- Expense Tracking: Tools to help users monitor their spending.
- Fixed Deposits: Competitive rates that rival wealth management startups like Piggyvest and Cowrywise.
Amechi Koldsweat, head of digital banking, emphasized the need for a product that meets the evolving needs of customers. He pointed out that the traditional image of LAPO as a lender to low-income earners does not fully capture the broader financial responsibilities of its clients, such as funding their children’s education.
Competitive Landscape
LAPO, which serves approximately 6 million customers, is entering a competitive digital banking market dominated by established players like OPay, PalmPay, and Moniepoint. Despite being a later entrant, LAPO MFB’s extensive physical presence across 34 states, long-standing experience in credit issuance, and existing cashback reward programs will serve as significant advantages.
“Our physical branches remain crucial for financial inclusion,” said Oluremi Akande, director of marketing and communications. He noted that while digital services are expanding, many customers still value in-person financial literacy programs and community support.
Growth Plans and Loan Strategy
With plans to double loan disbursements in 2025, LAPO MFB aims to utilize its app to provide “better and faster” loans, ranging from ₦20,000 to ₦50 million based on customer profiles. LAPO MFB projects monthly interest rates between 2.9% and 3.5%.
However, digital lending presents inherent risks. The recent closure of Techstars-backed Blackcopper, which collapsed under ₦1 billion in debt due to issues with customer repayment, highlights these challenges. LAPO MFB intends to adopt a cautious approach, starting with small digital loans and gradually increasing limits for borrowers with a solid repayment history.
Credit Assessment Partnerships
To enhance its lending practices, LAPO MFB is partnering with credit bureaus like CRC and First Central, leveraging its proprietary data to evaluate creditworthiness effectively. Koldsweat mentioned, “If customers have defaulted elsewhere, we will know before lending to them. For new users, we will review all the data that we can get.”
Conclusion
By combining its established reputation with new technological capabilities, LAPO MFB is positioning itself to serve its traditional market while attracting younger customers. Its measured rollout and hybrid strategy may prove essential in navigating the challenges of user inertia and competition from digital-only fintechs.
