FairMoney, a Nigerian digital banking and instant loan provider, is reported to have recorded N121.9 billion in gross revenue in 2024.
This represents a 62% year-on-year (YoY) growth increase in gross revenue, driven largely by its growing reliance on customer deposits to fund its lending operations. The company’s unaudited financial results revealed that profit after tax rose significantly to ?5 billion, up from ?780 million in 2023.
For the first time since it began accepting deposits in 2021, over 80% of FairMoney’s loan book was funded by customer deposits. This marks a major shift from 2020 when borrowings accounted for over 80% of funding. Deposits surged from ?2.9 billion in 2021 to ?72.9 billion in 2024, enabling the fintech to reduce external borrowing to less than 10%.
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In a discussion with TechCabal, the company disclosed that its massive growth recorded last year was driven by its innovative products and competitive offerings.
It said,
“Our strong growth in customer deposits is a result of our growing customer base, increased customer loyalty and trust, innovative products, and competitive offerings. Given the high inflationary macro environment, we believe in offering customers attractive rates that provide them, as close as possible, with positive real returns.”
FairMoney generated most of its revenue from loan interest, which rose 57% year-on-year to ?116 billion. The company’s profit margin also improved moving from 1% in 2023 to 4.79% in 2024.
Non-interest income remained modest at ?5 billion, including ?3.8 billion in fees and commissions and ?1.7 billion from other sources. Operating expenses were high, totaling ?41 billion and resulting in a cost-to-income ratio of 78%. Interest expenses increased slightly to ?10 billion from ?8.3 billion in 2023.
However, impairments on loans and other assets increased by 30% to ?59.4 billion in 2024, marking the first rise in two years. FairMoney’s impairments had stabilized at around ?45 billion following a 159% jump in 2022. This rise pushed the fintech’s non-performing loan (NPL) ratio to a startling 86.8% of its ?68.4 billion loan book.
FairMoney also reported a net interest margin of 64.72%, signaling strong earnings from interest-based operations. However, this margin is heavily reliant on high-yield loans—some with interest rates of up to 10% monthly. While lucrative, this model carries significant credit risk, as seen in the impairment figures.
The lender’s total assets rose by 55% year-on-year to ?99 billion, largely due to a ?30.4 billion expansion in its loan portfolio. However, its cash holdings dipped by ?2 billion to ?8.1 billion, while prepayments (early loan repayments) grew sharply from ?1.3 billion to ?9.3 billion.
FairMoney, founded in 2017 by Laurin Hainy, Matthieu Gendreau, and Nicolas Berthozat, has grown exponentially since its launch. In its first year of operation, the company had no more than 100,000 users. Now, it claims to have over 5 million users enjoying its banking, savings, and investment services, with over 10,000 daily loan disbursements.
Three years after launching its mobile lending service in Nigeria, the company expanded to India, Asia’s second-most populous country, in August 2020. According to the CEO Hainy, data-driven insights were behind the choice to expand to India. He noted that the Indian market is quite similar to that of Nigeria. In the Asian country, only 36% of adults have access to credit, leaving an untapped market of about 141 million people microfinance banks do not serve.
One stand-out feature for Fairmoney in its loan offerings is that it doesn’t collect collateral or documentation. Rather, the company bases the assessment of the customer on the information they provide on the app, which is their telephone number and the BVN.
Notably, the company has a talented tech team who have created a sophisticated algorithm that scores every customer and determines the volume of loans it can offer such a person and over what period. This is based on the activities the customers carry out with their phones; such as data from their banking activity
FairMoney is building the leading mobile bank for emerging markets. The fintech is on a mission to help the average Nigerian access finance tools to take control of both their life and their finances.