Rotimi Awofisibe is the Managing Director of VFD Microfinance Bank. In this interview, he shares with SEGUN KASALI issues around fintech system in Nigeria and many others. Except:
WHAT was life like for you, after University?
After university, I served at Sterling Bank’s Oju Iwoye branch, focusing on deposit mobilisation. The work was challenging—we often ventured into markets to collect raw cash, sometimes in large sums, like my first day when we handled N400,000 in the middle of a busy market. It wasn’t the experience I had hoped for, especially as many of my peers were at companies like Mobil and Chevron.
Two weeks later, I joined Lagos State Internal Revenue Service (LIRS) as a Revenue Supervisor in Tax Audit, where I spent nearly three years. I then transitioned to the private sector with a First Bank entry-level role. Starting afresh wasn’t easy, but I advanced from Customer Service to Business Performance Monitoring, focusing on performance management and strategy.
Later, I returned to Sterling Bank in a similar role before joining VFD Group in March 2018. That October, I was seconded as Technical Assistant to Dr. Rabiu Olowo, Lagos State Commissioner for Finance, a role I held for three years. Eventually, VFD offered me an Executive Director position, bringing my journey full circle.
Can you tell us about the origins of VFD Microfinance Bank?
VFD Microfinance Bank was incorporated in 2014; we are one of the first digital bank in Nigeria. We began with a lending-focused business model under a microfinance bank license, operating purely through digital channels without physical branches. By 2017, we fully embraced digitalization, and our visibility grew significantly in 2019/2020 during the COVID-19 pandemic, particularly when we appointed Don Jazzy as a brand ambassador.
VFD Microfinance Bank is a subsidiary of VFD Group, and we’ve intentionally pursued organic growth. This means expanding our balance sheet and shareholders’ funds without relying on venture capital or external funding. While other microfinance banks opted for rapid growth via VC funding, we’ve maintained our focus on sustainable growth. Today, our total customer accounts exceeds five million, with about 700,000 unique customers. Our goal for next year is to obtain a national banking license.
How is the bank performing financially?
We closed last year with a balance sheet of about N28 billion, and as of now, it has grown to approximately N37 billion. Deposit mobilisation has increased significantly, and we’ve made strides in recovering our Non-Performing Loans (NPLs). At the beginning of the year, our NPL stood at around 18 percent. We reduced it to 7.16 percent at one point, and it currently stands at about 9.8 percent, with a target of 5 percent in the near future.
What strategies are in place to achieve this reduction in NPLs?
The first step was identifying the core issues and addressing them directly. I engaged closely with my team, ensuring they aligned with my philosophy and approach. I believe in leading from the front, working hands-on with my team daily to tackle challenges.
By July, when we hit a profitability milestone, my team gained confidence in our strategy, and they even suggested setting higher targets. This close collaboration and shared belief in our vision have been key to driving results.
What is your perspective on the fintech ecosystem in Nigeria?
The fintech space represents the future—it’s already here. Commercial banks are investing heavily in technology to keep pace with fintechs, which have revolutionized access to financial services and transactions. Today, fintechs account for 50-60 percent of industry transaction volumes, a clear sign that they’re leading the market.
While commercial banks are adapting, fintechs have set the pace with continuous innovations, despite challenges like FX availability. The competition is healthy and underscores the need for the financial sector to evolve.
Is there a rivalry between banks and fintechs?
I wouldn’t call it rivalry—it’s more of a healthy competition. Like any evolving industry, the dynamics are shifting. Commercial banks are now acquiring microfinance licenses to tap into this growing space. It’s similar to how the top three banks in Nigeria today once displaced others to become market leaders. Change is inevitable, and the market will continue to evolve.
How can the government support the emerging fintech industry?
Many fintechs operate under microfinance bank licenses, which come with certain limitations. For example, 80 percent of loans must go to individual customers or microlenders, defined as those requiring loans below ₦5 million. This restricts fintechs from scaling transactions to the levels of commercial banks.
There’s also uncertainty around recapitalization policies. If microfinance banks are required to recapitalise, clarity on timelines would help us prepare. Additionally, allowing microfinance banks to participate in FX transactions, even with caps, would address unmet customer needs. For instance, customers often transfer funds to other platforms to complete basic international transactions like paying for Google services.
What is VFD’s stance on data privacy and security?
We strictly comply with the Central Bank of Nigeria’s (CBN) policies on data privacy and KYC requirements. Recently, the CBN mandated that customer data should not be stored outside Nigeria, which has prompted us to explore on-premise technology to ensure compliance.
To protect our customers’ data, we conduct vulnerability testing up to four times a year, ensuring our systems are secure. We’ve also partnered with trusted local and international platforms to strengthen our data protection measures.
What is the relationship between fintechs and Nigeria’s youth?
The youths have been early adopters of fintech innovations due to the speed, convenience, and reliability these platforms offer. Among our customers, depositors range in age from 24 to 46, while lending customers are typically 35 to 50. Youths are more comfortable saving with us, while older customers tend to access loans.
As mindsets evolve, we expect younger customers to engage more with loan products. Our app is user-friendly and designed for seamless self-service. Customers can download the app, fund their wallets, and transact without assistance, making it an attractive option for tech-savvy users.
What are your final thoughts about the fintech landscape?
In the coming years, we anticipate a shift in lending behaviour among younger customers. As the fintech landscape matures, VFD Microfinance Bank will continue to innovate and adapt, ensuring we meet the evolving needs of our customers while maintaining robust growth and operational efficiency.
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