Nigerian fintech Paystack, owned by Stripe, has made its first major move into banking with the acquisition of Ladder Microfinance Bank, marking a strategic expansion beyond its decade-long focus on payments. The acquisition gives Paystack greater control over the funds it processes and opens new opportunities to offer lending and deposit services to Nigerian businesses.
The newly acquired entity, Paystack Microfinance Bank (Paystack MFB), will initially focus on lending to businesses before extending services to consumers. The bank will also provide banking-as-a-service (BaaS) products, enabling companies to build financial products and treasury management solutions on Paystack’s platform, according to Amandine Lobelle, Paystack’s chief operating officer.
“After 10 years of building payment infrastructure, we realised that businesses needed more than just getting paid to grow,” Lobelle told TechCabal. “We wanted to leverage the expertise that we have built over the last decade to continue to address some of the pain points that businesses have.”
Paystack MFB will operate independently from Paystack’s payments business under the company’s American parent, though the two arms will collaborate within the regulatory framework. Lobelle emphasized that the separation of licenses and governance allows Paystack to test lending and deposit products without the regulatory scrutiny of a full commercial banking license.
This move builds on Paystack’s push into consumer-facing financial services, which began with the launch of its consumer payments app, Zap, last year. The microfinance bank now provides regulatory backing for Paystack to hold deposits, a critical step toward expanding into credit and financial services beyond payments.
With over 300,000 Nigerian businesses using its payment infrastructure, Paystack now has the ability to upsell banking services and tailor products to clients, increasing margins while addressing long-standing gaps in small business finance. Paystack MFB also aims to lower barriers to banking product creation through its BaaS platform, echoing how Paystack simplified online payments for businesses a decade ago.
“The addition of Paystack MFB allows us to combine the rapid innovation of a tech-first platform with the stability of traditional banking,” Lobelle said.
Targeting Small Business Financing
Nigeria’s small business financing gap remains significant, estimated at $32 billion. While payments data gives insights into merchant revenue, scaling credit requires deposit-taking capabilities and regulatory cover—both now provided by the microfinance bank. Paystack MFB plans to offer working capital loans, merchant cash advances tied to payment flows, overdrafts, and term loans, using transactional data to assess cash flow and price risk more accurately than traditional lenders.
By holding deposits in-house and integrating lending with its payment infrastructure, Paystack can reduce reliance on legacy banks for liquidity and compliance. The company aims to make Paystack MFB the primary account for businesses by emphasizing speed, reliability, and seamless access to funds.
Competitive Landscape and Strategy
Paystack MFB enters a crowded field of financial services providers in Nigeria, including traditional microfinance banks like LAPO, Accion, and Baobab; digital-first lenders like Carbon and Fairmoney; and embedded-finance players such as Moniepoint, OPay, PalmPay, and Kuda. Unlike Kuda, which started with consumer deposits before offering credit, Paystack is approaching banking from an infrastructure-first perspective, leveraging its payments platform to offer financial services more efficiently.
The acquisition does not affect Paystack’s partnerships with commercial banks like Titan Trust, which remain critical to its payments business. Similarly, Paystack MFB will operate independently of Brass, another financial services platform backed by a Paystack-led consortium.
Securing the microfinance license represents more than a product expansion—it reflects a structural shift. Where payments made Paystack a key layer of Nigeria’s digital economy, banking allows the company to own higher-margin parts of the financial stack and directly address friction points for small businesses.