Nigeria's Digital Bank, Kuda Announces Over N6 Billion Loss For 2021

• Nigeria's first digital bank, Kuda Bank, announced that it made a loss of over N6 billion in 2021
• The bank's statement also shows that it has experienced a losing streak in the last two years
• However, the company's revenue jumped by over 3,000 per cent from N7.6 million in 2020 to N3.2 billion in 2021

Nigeria's challenger bank, Kuda Microfinance Bank, has incurred losses of over $6 billion, a loss streak spanning two years.

TechCabal reports that at the end 2021 financial year, the bank recorded a loss of N6,092,554,866, about $14.2 million and a 602 per cent increase from the N868 million or $2 million loss it recorded in 2020.

4,315 per cent revenue increase

According to the financial report, the company's revenue increased by 4,315 per cent from N7.6 million in 2020 to N3.2 billion in 2021.

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The company's net profit indicates that it recorded a net loss with high credit loss/impairment charge and operating expenses which contributed to most of the losses.

The report also said that the bank's non-performing loan (NPL) is too high, which is calculated at 69 per cent and drove the bank to a high impairment rate valued at N2.2 billion.

Loans are impaired when it becomes evident that the creditor will be unable to collect all interest and principal payments due to it, according to the contractual terms of the facility.

The firm, in March 2021, began piloting its overdraft project with over 2,500 active bank users.

Increasing active users

By June last year, the company announced it had hit 50,000 weekly active users. The bank also stated that it disbursed about $20 million worth of credit to over 200,000 eligible users with a 30-day repayment period.

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Babs Ogundeyi, the bank's co-founder, said it had witnessed minimal default because of its style, saying that the bank uses all available data for customer and allocate an overdraft proportion based on the customer's activities and allowing it to be a burden.

The bank's personnel cost also spiked by nearly 500 per cent from N215.4 million in 2020 to N1.2 billion as of its ballooning employment of key management staff at a high cost, salary reviews and promotion of existing staff.

In August last year, the bank raised about $55 million in Series B funding and is now valued at $500 million, making it more valuable than most conventional banks in Nigeria.

During its Series B announcement, Kuda Bank said it had added 1.5 million users to bring its entire customer base to about 4 million customers.

Nigeria’s digital-only Bank, Kuda, lays off 23 staff as cost skyrocket

Legit.ng reported that Nigeria’s first digital-only bank, Kuda bank, has become one of the lasted startup and tech firms to lay off staff.

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TechCrunch reported that the news was confirmed in an email by the company after a source tipped it off about the sack.

The company said it laid off less than 5 per cent of its 450 workforce, which is about 23 people.

Source: Legit.ng