Nigerian fintech Sycamore is targeting more than $29.13 million, approximately ₦40 billion, in customer deposits after acquiring a microfinance bank in Kano, marking a major strategic shift from its origins as a digital lending platform into a broader financial services group.
The acquisition, involving an undisclosed Kano-based microfinance bank, gives Sycamore direct access to customer deposits and national payment infrastructure, positioning the company to compete more aggressively with traditional financial institutions and fast-growing fintech rivals.
The move reflects a wider transformation underway in Nigeria’s fintech ecosystem, where digital finance companies are increasingly pursuing banking licenses and regulated financial infrastructure to reduce funding costs, deepen customer relationships, and expand service offerings beyond payments and lending.
According to Sycamore Chief Executive Officer Babatunde Akin-Moses, deposit mobilisation will become a central priority for the company as it seeks to build a more sustainable and scalable funding structure.
Traditionally, Sycamore relied heavily on institutional debt and commercial paper issuances to finance its lending operations. By securing a microfinance banking license, the company can now access customer deposits, which represent a significantly cheaper and more stable source of capital than debt financing.
The transition follows Sycamore’s recently oversubscribed ₦6.89 billion commercial paper issuance, valued at roughly $4.99 million, which had already signaled the company’s efforts to diversify its funding strategy beyond venture capital.
The acquisition also enables Sycamore to integrate directly with the Nigeria Inter-Bank Settlement System (NIBSS) Instant Payment platform, allowing the company to offer real-time payment services and traditional banking functionalities such as deposit accounts.
Under its expanded structure, the company will now operate across three major segments: Sycamore Integrated Solutions Limited (SISL), its lending arm; Sycamore Investment and Asset Management Limited (SIML); and the newly established Sycamore Microfinance Bank.
As part of the restructuring, SISL is expected to transition into Sycamore Capital Group (SCG), with projected Assets Under Management estimated at approximately ₦60 billion, or $43.69 million.
The company has been steadily laying the groundwork for this broader financial ecosystem. In March 2025, Sycamore secured a Securities and Exchange Commission license for asset management, placing it among Nigeria’s regulated capital market operators in a sector long dominated by firms such as Stanbic IBTC Asset Management.
Sycamore reported roughly $5 million in revenue in 2025 and processed approximately ₦100 billion, equivalent to $73 million, in transaction volume while serving more than 400,000 customers.
The fintech’s expansion comes amid a broader wave of consolidation and regulatory repositioning across Nigeria’s digital finance sector.
Earlier this year, Paystack, owned by Stripe, acquired Ladder Microfinance Bank with plans to operate under the Paystack Microfinance Bank brand. Similarly, Flutterwave secured a microfinance banking license through its acquisition of open banking startup Mono.
These acquisitions underscore a growing recognition among fintech operators that long-term sustainability in financial services increasingly depends on controlling regulated infrastructure, customer deposits, and payment rails rather than operating solely as technology layers on top of traditional banks.
At the same time, the Central Bank of Nigeria has intensified efforts to restructure and formalise the regulatory framework governing fintechs and microfinance institutions. The regulator has been upgrading licenses for firms operating nationally in a bid to align oversight with the scale of digital financial operations while strengthening financial inclusion initiatives.
The competitive implications are becoming increasingly significant for traditional banks, as fintechs leverage technology, customer data, and digital distribution models to deliver lending and financial products more efficiently and at scale.
However, analysts note that building a successful deposit-driven banking business presents its own challenges. Nigeria’s financial sector remains highly competitive, with established banks, mobile money operators, and digital finance platforms all competing for customer trust and liquidity.
For Sycamore, the Kano-based acquisition also signals a strategic push into Northern Nigeria, a region viewed as a major growth opportunity but one that requires tailored financial products, strong local trust networks, and, in many cases, Islamic-compliant financial structures aligned with regional preferences.
Industry observers say the company now faces the task of converting its existing lending and investment users into full banking customers while navigating the operational and regulatory complexities associated with deposit-taking institutions.
The next 18 months are expected to be critical as Sycamore attempts to scale its deposit base, deepen infrastructure integration, and position itself as a comprehensive financial ecosystem rather than a standalone lending platform.
For African fintech founders and investors, the company’s latest move offers a broader lesson about the future direction of digital finance on the continent: sustainable growth increasingly requires ownership of regulated financial infrastructure and direct access to capital sources, rather than dependence on external funding markets alone.
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