Nigerians react to N6 billion loss reported by Kuda Bank

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Nigerians have reacted to Kuda Microfinance Bank’s N6 billion loss in 2021, which was more than 7 times the N868 million loss it declared in 2020.

The company has come under fire for its “bank for the free” customer acquisition campaign, which doesn’t charge for transfers within the bank. Additionally, the concept entails 25 free transfers each month to other banks, with additional free transfers to other banks costing N10 apiece.

There are numerous recommendations for modifying the bank’s strategy to help it increase revenue and move in the direction of profitability.

What they are saying 

 @Afolabij1 stated, “On Kuda’s financial status (FY21), the bank is doing 3bn revenue while running at 6bn loss (Naira). High spending, high defaulting on overdrafts, and expensive marketing among others contributed to this performance. The bank will have to cut costs, correct its overdraft ratio, and further grow its revenues as it looks to be profitable, going forward.” 

@ErnieFemiOwen stated, “This Kuda Bank madness just goes to validate my point! Product managers with banking experience are very essential to any Startup. We see beyond the product set up Why on God’s green earth will I permit free transfers? I’d rather improve your transfer experience than reduce cost.”


What you should know:

• In 2021, Kuda Bank recorded income of N3.2 billion, up from N72.6 million in the corresponding period in 2020.

• The aggressive growth and market penetration the bank used during the year as it concentrated on growing its loan book led to the 44x increase in revenue in only one year.

• The bank informed customers by mail in July that, in accordance with the federal government’s stamp duty statute, it would begin charging N50 on all deposits of N10,000 or more made into customers’ Kuda accounts.

• It specified that the change would apply to cash deposits made into accounts at any of its partner banks as well as deposits made using debit cards, electronic transfers, and cash deposits made into accounts.

• In the meantime, it emphasized that it would receive nothing from the N50 fees because everything would go directly into the government’s coffers.


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