Fidelity Bank’s 2.4% decline in net loans is proof that fintech is winning

Fidelity Bank released its FY 2025 audited financial statements in May 2026. The headline numbers look stunning because gross earnings jumped 45.6% to ₦1.52 trillion. The bank is wildly profitable. The eligible capital sits at ₦532 billion, safely above the CBN’s ₦500 billion minimum. By every traditional banking metric, Fidelity Bank is thriving.

But…net loans and advances fell 2.4% to ₦4.28 trillion.

While Fidelity Bank contracted its lending, Nigerian fintechs like Moniepoint disbursed over ₦1 trillion in credit to small and medium-sized businesses in 2025 alone. The difference between these two numbers explains why fintech has already won the SME credit market in Nigeria.

Fidelity Bank is not losing market share to fintech because fintech is better at serving the same customers. Fidelity Bank is losing because it has abandoned the customers fintech now serves.

Nneka Onyeali-Ikpe – Group Managing Director/Chief Executive Officer – Fidelity Bank

Fidelity Bank’s deliberate retreat

Fidelity’s loan book contraction did not happen by accident. The bank’s own disclosure explains it clearly. The decline occurred as management optimised its balance sheet and customers paid down on their mature obligations. Rather than reissue that credit back into the market, especially to volatile small businesses, Fidelity Bank hoarded the capital.

The evidence is stark. Fidelity Bank maintained an official liquidity ratio of 66.5%, shattering the CBN’s 30% regulatory floor. However, its Capital Adequacy Ratio sat tightly at 16.21%, leaving a narrow 1.21% cushion above the Central Bank of Nigeria’s strict 15% minimum threshold for international banking operations. The bank is sitting on trillions of naira in highly liquid cash equivalents, but it cannot afford risk assets that weigh heavily against its thin regulatory capital buffer. It is choosing safety over deployment.

Why? The CBN’s ₦500 billion capital requirement forced an aggressive strategic pivot. In December 2025, Fidelity finalised a private placement to pump in ₦227 billion in fresh equity value, bringing its Total Qualifying Tier 1 & Tier 2 Regulatory Capital to ₦504.16 billion. It cleared the line by a razor-thin margin. To achieve this, the bank cut its dividend payout entirely to zero. There is simply no surplus capital left over for high-risk retail credit pipelines.

This is a rational decision for a Tier 1 bank playing by regulatory rules. But it is a structural opening for fintech.

The SME credit market nobody wanted

The data reveals just how large that opening is. According to the 2025 World Bank Enterprise Survey, a staggering 94.8% of SMEs in Nigeria maintain formal bank accounts, yet only 20.2% can successfully access bank loans. This stark disconnect creates an environment where roughly 42% of these enterprises find themselves partially credit-constrained.

Traditional commercial institutions welcome small business deposits, but completely lock them out when it comes to capital deployment, leaving a mere 1.5% of SME investments to be financed through banks.

A merchant running a supermarket in Lagos with ₦20 million in annual revenue has no land deed, no five-year audited financials, and no relationship manager who knows their name. To Fidelity Bank, that merchant is invisible. To Moniepoint, that merchant is a data point on a POS machine.

Moniepoint processed ₦412 trillion in transactions across 14 billion individual transactions in 2025. That transaction flow is the collateral that traditional banks can never see. Every purchase at a supermarket register, every phone credit sold, every fuel pump transaction is recorded.

Moniepoint knows exactly how much cash flows through that merchant’s account every single day. Speed and data have replaced land deeds and audited financials.

How Fintech scaled where banks retreated

The scale is breathtaking. Moniepoint issued over ₦1 trillion in loans in 2025 exclusively to small businesses. That credit was distributed to roughly 70,000 businesses. The average loan size: ₦14.3 million per business. This is real working capital for real businesses.

The impact is measurable. Businesses that received Moniepoint credit saw an average 36% growth in transaction value post-loan, according to Moniepoint’s 2025 Year in Review.

That growth compounds: repeat borrowers take a second loan within months, then a third, then a fourth. Moniepoint’s ₦1 trillion in disbursements in 2025 reflects merchants repeatedly cycling through credit because the speed and terms beat anything Fidelity offers.

The POS data advantage is almost totalising. Moniepoint captured an estimated 80% (8 out of 10) of all in-person POS merchant transactions in Nigeria. They are the financial spine of Nigerian retail. Every competitor, OPay with 40 million active users, PalmPay with 35 million, is building lending products on top of that transaction monopoly.

OPay launched credit personalisation in 2025, linking alternative POS and peer-to-peer data directly to its digital lending arm (OKash) to bypass traditional credit-scoring gaps entirely. The velocity is the point.

A merchant registers a POS machine, processes transactions for 48 hours, and receives a loan offer the next week. Fidelity Bank’s underwriting committee meets quarterly, if a relationship manager remembers to submit the file.

The market that proves it

Point of Sale transaction volume in Nigeria is the clearest signal. POS volumes surged 79.03% to ₦18.78 trillion in Q1 2026 alone, up from ₦10.49 trillion in Q1 2025. That explosion in transaction volume is merchants using fintech for payment processing and increasingly turning to fintech for working capital because traditional banks disappeared.

Fidelity Bank grossed ₦1.52 trillion in revenue in 2025, a 45.6% jump. The bank is profitable and compliant. But it is no longer in the business of lending to the merchants who process ₦18 trillion annually in transactions. Those merchants now turn to Moniepoint, OPay, and PalmPay.

This is Fidelity Bank exiting a market segment entirely and fintech colonising it.

Why this matters

The traditional narrative says fintech disrupts banking. This story is more accurate:

Fidelity’s numbers are a map of where fintech has already established dominance. Every ₦1 trillion in POS volume growth. Every 36% transaction value spike for funded merchants. Every 70,000 SMEs that received credit for the first time in their business history. These are the spaces traditional banks abandoned.

The CBN’s capital requirement was intended to consolidate banking and protect systemic stability. It had an unintended consequence: it locked traditional banks out of the SME credit market at precisely the moment fintech was ready to enter it. Fidelity could not afford to serve merchants. Moniepoint made it their entire business.

The numbers

Fidelity Bank FY2025 (Audited):

• Gross Earnings: ₦1.52 trillion (+45.6% YoY from ₦1.04T in FY2024)
• Net Loans & Advances: ₦4.28 trillion (-2.4% YoY from ₦4.39T in FY2024)
• Liquidity Ratio: 66.5% (vs 30% regulatory minimum)
• Eligible Capital (Tier 1 & Tier 2 Qualifying): ₦504.16 billion (vs ₦500B CBN requirement)
• Customer Base: 9.1 million across 250 business offices

Moniepoint (2025 Disclosures):

• SME Loans Disbursed: Over ₦1 trillion in 2025
• Businesses Funded: ~70,000 SMEs
• Average Loan Size: ₦14.3 million per business
• Post-Loan Impact: 36% average growth in transaction value for merchants
• POS Transaction Volume: ₦412 trillion across 14 billion transactions in 2025
• Market Share: Estimated 80% of in-person POS merchant transactions in Nigeria

OPay & PalmPay (Late 2025/Early 2026):

• OPay Active Users: 40+ million
• OPay Annual Transaction Run Rate: $50 billion
• OPay Agents Network: 600,000+ physical agents
• PalmPay Registered Users: 35 million (April 2026 NIBSS update)
• Digital Lending Product: OKash (OPay) linking POS/P2P data to credit decisioning

Nigeria’s SME Credit Market Context:

• Bank Account vs. Credit Access Gap: 94.8% of SMEs have formal accounts, but only 20.2% have loan access; just 1.5% of investments are bank-financed (2025 World Bank Enterprise Survey)
• POS Volume Growth: +79.03% YoY to ₦18.78 trillion in Q1 2026 (from ₦10.49T in Q1 2025)
• Transaction-Based Lending: Now the primary underwriting mechanism for fintech platforms

Methodology & Sources

• Fidelity Bank profit and balance sheet data are from the bank’s audited FY 2025 Annual Report (published May 2026).
• Moniepoint’s ₦1 trillion disbursement, business count, average loan size, and post-loan impact data are from Moniepoint’s 2025 Year in Review (January 2026).
• OPay and PalmPay user and network figures are from company disclosures and NIBSS regulatory updates (April 2026).
• POS transaction volume growth figures are from CBN payment systems data through Q1 2026.
• All figures are from audited or regulatory sources except where noted as “estimated” or “per company disclosure.”