Nigerian microfinance bank, LAPO, is poised to launch a digital banking app in the first quarter of 2025, marking a significant shift in its strategy to broaden its appeal beyond its traditional base of petty traders. With 35 years of history in providing small-ticket loans to low-income earners, LAPO aims to reshape its image and attract a younger demographic.

The LAPO app will offer users a range of services, including loan applications starting at ₦20,000, bill payments, daily transactions, expense tracking, and fixed deposits at rates comparable to wealth management startups like Piggyvest and Cowrywise. According to Amechi Koldsweat, head of digital banking, "We're creating a product that resonates with the evolving needs of our customers." The bank's executives believe that its extensive physical presence across 34 states, long history in credit issuance, and existing cashback reward programs will be significant competitive assets in Nigeria's digital banking market.

LAPO's hybrid strategy will blend digital innovation with its traditional in-person services. Oluremi Akande, director of marketing and communications, emphasized that "our physical branches remain crucial for financial inclusion." The bank will continue to offer in-person financial literacy programs and community support, while expanding its digital services.

LAPO plans to grow loan disbursements from ₦237 billion in 2024 to over ₦400 billion in 2025, using its app to issue "better and faster" loans ranging from ₦20,000 to ₦50 million, depending on customer profiles. The bank will implement a measured approach to digital lending, starting with small loans and gradually increasing limits for borrowers with a strong repayment history.

To mitigate risks associated with digital lending, LAPO is partnering with credit bureaus like CRC and First Central, and leveraging its proprietary data to assess creditworthiness. Koldsweat explained that "if customers have defaulted elsewhere, we will know before lending to them. For new users, we will review all the data that we can get."

By combining its long-standing reputation with new technological capabilities, LAPO is positioning itself to serve both its core market and attract new, younger customers. The bank's careful rollout and hybrid strategy could prove vital in an environment where user inertia and stiff competition from digital-only fintechs remain significant challenges.

LAPO's entry into Nigeria's competitive digital banking market will pit it against established players like OPay, PalmPay, and Moniepoint. However, the bank's unique blend of traditional and digital services may help it carve out a distinct niche in the market.

As LAPO prepares to launch its digital banking app, the move is expected to have significant implications for Nigeria's fintech landscape. The bank's ability to balance its traditional strengths with innovative digital services will be closely watched, and its success could pave the way for other microfinance banks to follow suit.