Nombank, the banking subsidiary of Nigerian fintech Nomba, is targeting a larger share of Nigeria’s small business banking market by leveraging merchant transaction data to provide loans and other banking services to businesses that have long faced difficulties accessing finance from traditional lenders.

The move comes amid growing competition among financial institutions to serve Nigeria’s millions of micro, small and medium-sized enterprises, many of which remain excluded from formal credit despite their significant contribution to the economy. Conventional banks have typically required collateral, audited financial records and extensive documentation, conditions that many small businesses are unable to satisfy.

Managing Director of Nombank, Seun Osunkeye, said the bank intends to close that financing gap by analysing transaction data generated through Nomba’s payments platform to evaluate the financial performance of merchants and make lending decisions based on their actual business activity.

“My interest in this space goes back to my undergraduate thesis, where I examined how microfinance banks support SMEs and how access to capital determines whether a small business survives or grows,” Osunkeye said, according to The Punch.

“Working closely with merchants at Nomba reinforced what I had seen years earlier. Many SMEs are viable businesses but remain locked out of the formal financial system because financial products were never designed around how they actually operate.”

Nombank was established after Nomba obtained a microfinance banking licence, enabling the fintech company to accept deposits and provide credit through its own regulated banking entity instead of depending entirely on third-party banking partners.

Osunkeye said the initial goal was to build banking infrastructure to support Nomba’s payments ecosystem, but the strategy has since expanded beyond that original objective.

“We no longer see Nombank purely as infrastructure sitting underneath Nomba,” he said. “We see it as a distinct banking business with its own customer segment and value proposition.”

Nombank’s expansion strategy is anchored on the transaction volumes generated across Nomba’s merchant network. According to Osunkeye, the value of daily transactions processed on the platform rose from about N7bn in May 2025 to roughly N250bn in May 2026, giving the company access to an expanding pool of data for evaluating business performance and creditworthiness.

He said the transaction data provides valuable insights into merchants’ cash flow, seasonal business trends and overall operating performance—information that is often unavailable to traditional lenders and credit bureaus.

“Our advantage is data,” Osunkeye said. “A banking licence is something others can obtain. The institutional trust and years of transaction data built from serving merchants are much harder to replicate.”

Instead of relying on extensive paperwork before approving loans, Nombank uses merchants’ transaction histories to assess creditworthiness and make lending decisions more quickly.

“Traditional lenders typically ask for audited financial statements, physical collateral and extensive documentation,” he said. “Because we already understand how many of these businesses operate through their transaction data, we can assess credit in near real time and structure facilities around their actual working capital cycles.”

Beyond direct lending, the bank is also positioning itself as an embedded finance provider, allowing businesses to integrate regulated banking services directly into their digital platforms and customer offerings.