Kuda Bank, the Nigerian fintech valued at over $500 million, recorded a NGN6 billion (or $14.2 million) loss in 2021. According to a TechCabal report, the year marked the second one that the company had recorded losses in a row.
In 2020, Kuda lost NGN868,062,000 ($2 million), but its number the next year was more than seven times the previous one. This loss occurred even though it increased its revenue from NGN72,649,000 in 2020 to NGN3,207,177,570 in 2021.
Of the whopping NGN6 billion loss, a little less than half came from nonperforming loans (NPL), which accounts for NGN2,258,698,669.
Why not just go and collect from debtors? These loans are considered impaired because it is likely that Kuda can collect the interest and principal payments it should, according to the events and info it has on the debtors.
Also read:
– South Korea asks Interpol to issue red notice on LUNA founder Do Kwon
– YouTube ending experiment causing more unskippable ads
– Kuda, Nigerian Start-Up Makes Record In Africa, Raises $10m.
In 2021, the fintech was offering an overdraft product that saw it give out $20 million worth of credit to more than 200,000 users by the middle of the year. It claimed that the loans had a 30-day repayment duration.
However, it seems that something went wrong somewhere along the line. Probably, its risk assessment system had not worked out as well as the bank believed.
Besides the bad loans, Kuda also increased spending, and its expenses went up by 500%. Likely, this is because it increased its number of staff, promoted old staff and reviewed some salaries. The fintech’s operating expenses in 2021 alone were NGN7,033,275,412.
Additionally, it invested heavily in marketing, with more than $1 million sunk into taking the brand to every eye in Nigeria.
There is no need to panic, at least not yet, Kuda is still more valuable than many traditional banks in the country, and it will be a long time before finances start to cause the board concerns.
Also, thanks to unceasing funding, the fintech is still hiring in critical roles as it plans to take its services beyond its home country and, eventually, outside Africa. Its layoffs and transaction fees could also go a long way in improving its fortune in 2022.
For your daily dose of tech, lifestyle, and trending content, make sure to follow Plat4om on Twitter @Plat4omLive, on Instagram @Plat4om, on LinkedIn at Plat4om, and on Facebook at Plat4om. You can also email us at info@plat4om.com and join our channel on Telegram at Plat4om. Finally, don’t forget to subscribe to OUR YOUTUBE CHANNEL.
