Nigerian fintech Sycamore wants $29 million in deposits after MFB acquisition

Sycamore, a Nigerian fintech, wants to build a deposit base that could exceed ₦40 billion ($29.13 million) as it expands from digital lending into banking and payments following its acquisition of a microfinance bank licence. 

The digital lender acquired the MFB licence through the acquisition of an undisclosed Kano-based microfinance bank. The company’s chief executive officer, Babatunde Akin-Moses, told TechCabal in an interview on Tuesday that deposit mobilisation would become one of its biggest priorities now that it can hold funds. 

“Deposit mobilisation is going to be very critical,” he said. 

The move reflects a broader shift among Nigerian fintechs that are increasingly acquiring microfinance banking licences to gain direct access to deposits and cheaper capital. 

In April, Flutterwave, the Nigerian fintech unicorn, secured an MFB licence after acquiring open banking startup Mono. In January, Paystack acquired Ladder Microfinance Bank, as fintechs try to convert payment users into banking customers.

For Sycamore, the MFB acquisition marks a transition from operating primarily as a digital lender to becoming a broader regulated financial services group with three business lines: Sycamore Integrated Solutions Limited (SISL), its flagship lending business; Sycamore Investment and Asset Management Limited (SIML); and now, Sycamore Microfinance Bank.

“So SISL will become Sycamore Capital Group (SCG), with an AUM of ₦60 billion ($43.69 million), to reflect the new structure of the business,” Akin-Moses said. 

The MFB licence also removes the company’s dependence on third-party banks for wallets and fund settlements while giving it direct access to payment rails and customer deposits.

“We are already using third-party wallets today,” Akin-Moses said. “It is just that we do not control those wallets right now.”

The acquisition will allow Sycamore to integrate directly with the Nigeria Inter-Bank Settlement System (NIBSS) Instant Payment platform to offer real-time transfers and traditional deposit account services to customers.

More importantly, deposits could significantly reduce Sycamore’s cost of capital.

The startup has historically relied on commercial papers and institutional debt to fund lending operations. Deposits, however, offer a much cheaper source of funding.

“Every single sort of money that comes to the platform comes with a significant lender cost,” Akin-Moses said. “But now for deposits, we will be able to have those at cheaper costs.”

According to him, the lower funding costs could eventually translate into cheaper loans for customers.

“And the whole idea is that we should be able to eventually pass those cheaper costs on to our borrowers as we grow,” he said.

The company is targeting between ₦40 billion ($29.13 million) and ₦50 billion ($36.41 million) in loans this year, according to Akin-Moses, who said Sycamore would need deposits that exceed that figure to support its lending ambitions.

According to him, the company is targeting deposits that could eventually reach between 30% and 50% above projected loan disbursements.

In 2025, Sycamore disbursed close to ₦20 billion ($14.56 million) in loans, according to Akin-Moses. This year, the company is aiming to at least double that figure as demand from businesses increases.

Its average loan ticket size has also grown. While Sycamore previously issued average loans of around ₦10 million ($7,282), with a maximum limit of ₦20 million ($14,563), its average ticket size has now risen to between ₦30 million ($21,845) and ₦40 million ($29,126). The company has also increased its maximum loan size to ₦100 million ($72,815).

“Apart from increased capacity of our balance sheets, which is part of why we raise money in commercial paper, the whole idea is that people need more,” Akin-Moses said. “Businesses need more.”

The company’s expansion mirrors broader trends in Nigeria’s digital lending market. FairMoney Microfinance Bank said it disbursed more than ₦150 billion ($109.22 million) in loans in 2025. Moniepoint said it disbursed over ₦1 trillion ($728.15 million) in loans to small businesses during the same period.

Sycamore currently serves more than 400,000 users across its lending, investment, and savings products and operates digitally in more than 22 Nigerian states. The company also maintains physical presence in Lagos, Abuja, Port Harcourt, Kano, and Ibadan.

Akin-Moses said Sycamore believes its existing customer base gives it a starting point for deposit mobilisation.

“This is also driven by customer demand,” he said, adding that some users wanted to use cash flows already existing within Sycamore’s ecosystem as collateral for loans.

Northern Nigeria is also becoming an increasingly important part of the company’s growth strategy, which partly influenced its decision to acquire a Kano-based microfinance bank.

According to Akin-Moses, many consumers in the region are still unfamiliar with digital investment and savings products that have become more mainstream in cities like Lagos.

But unlike Lagos, where many fintechs scaled largely through digital distribution, Sycamore believes expansion in northern Nigeria will require physical operations, stronger local trust, and products adapted for more Islamic-compliant financial structures.

“We are looking to modify some products to be more Islamic-compliant,” Akin-Moses said. “We do have a physical office in Kano to make that agenda a reality. We bought a Kano-based MFB because of the opportunity there.”

Beyond Nigeria, the startup is exploring diaspora opportunities, particularly in the United Kingdom and Canada. It sees a lending opportunity in the UK and an investment one in Canada. 

“We see that as a potential opportunity to partner with some UK-based companies, even have some sort of UK presence,” he said. “Canada will be looking at it like the market for investments for diasporas.”

The company says it is also open to future acquisitions as it expands into additional financial services, particularly cross-border products.

“One of the trends we are seeing this year is acquisitions,” Akin-Moses said. “If there is some capability we are trying to build, we do not always have to build from scratch.”

For now, however, Sycamore’s immediate challenge is convincing customers to trust a fintech lender with tens of billions of naira in deposits.