Moniepoint has been hit by loan default surge, raising concerns over aggressive SME lending strategy.
NewsOnline Nigeria reports that Moniepoint Microfinance Bank is facing mounting criticism after its non-performing loans surged to about N7 billion, exposing weaknesses in its fast-growing but increasingly risky SME lending model.
The fintech lender, licensed by the Central Bank of Nigeria, rapidly scaled its credit operations in 2025, disbursing over ₦1 trillion to small businesses across Nigeria. While this positioned the company as a key player in bridging the financing gap left by cautious traditional banks, analysts now warn that the pace of expansion may have outstripped its risk controls.
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The cracks are becoming more visible through high-profile defaults, particularly involving Alerzo Limited and Retail Supermarkets Limited. Moniepoint’s ₦5 billion facility to Alerzo, structured over 18 months, quickly deteriorated, leaving an outstanding balance of ₦4.38 billion within a year. The lender moved to freeze the company’s assets through court action, with the borrower now reportedly liquidating parts of its fleet to stay afloat.
A similar pattern played out with Retail Supermarkets Limited over a ₦2.4 billion loan, as ShopRite operations across Nigeria collapsed, raising further concerns about Moniepoint’s credit decisions on larger, corporate-style borrowers.
These cases have drawn scrutiny because they deviate sharply from Moniepoint’s core model of short-term, high-frequency SME loans tied to transaction data. By extending longer-tenor facilities in a volatile economic environment marked by inflation, currency instability, and thin margins, the company appears to have taken on outsized risk.
Critics argue that its heavy reliance on internal payment data may have created blind spots, failing to capture broader financial exposures such as external debt obligations, cash flow shocks, and macroeconomic pressures. The speed at which some of these loans turned sour has intensified questions about due diligence and borrower assessment.
Although the Central Bank of Nigeria has not directly intervened in these specific cases, it has tightened credit rules across the sector, reflecting broader concerns about rising loan defaults and systemic risk.
The situation also revives memories of past banking failures, including the collapse of Heritage Bank in 2024, where unchecked bad loans ultimately led to insolvency and regulatory takeover.
Moniepoint has responded with aggressive recovery efforts, including court-ordered asset freezes and enforcement mechanisms. However, industry observers note that securing assets is only the first step, and actual recovery of funds could prove slow and uncertain.
With rising defaults and growing scrutiny, Moniepoint now faces a critical test: whether it can rein in its lending risks or risk undermining confidence in its model and the broader fintech-driven credit expansion in Nigeria.
