FairMoney’s revenue increased by 62% to reach ₦121.9bn, while profits from deposit-based lending activities grew to ₦5bn during 2024.
Fairmoney reached its highest level of customer deposit usage ever since starting to accept deposits in 2021 because its customer deposits expanded to exceed 80% of its loan book following a major increase from ₦2.9 billion in 2021 to ₦72.9 billion in 2024.
The change in funding source helped Fairmoney reduce its need for outside loans so they now depend on external borrowing by only less than 10%.
According to Fairmoney, the growth in customer deposits stems from having a rising customer base combined with enhanced loyalty and increased trust and innovative products, and attractive offers. Due to the current high inflation rates our company provides top attractive interest rates that provide depositors with the best possible real-world returns.
The business improves profitability through customer deposit reliance, which reduces costs better than borrowing from other source,s including commercial papers for customer loans. Thus creating potential increased business profitability.
The organization maintains a permanent review of its funding model to achieve stability between retail customers and HNI customers and corporate customers and debt instruments together with commercial papers.
Fairmoney earns most of its income from customer loan interest payments that grew 57% to ₦116 billion throughout 2024. Fairmoney sustained its financial growth by enhancing profit margin rates to 4.79% whereas 2023 reporting only 1% profit margin. The platform retains approximately five nairas from every one hundred nairas it accrues.
The company’s interest expense increased to ₦10 billion as part of a small amount of growth from ₦8.3 billion during 2023. Organizational non-interest revenues at the lender reached ₦5 billion in 2024 by combining ₦3.8 billion from fees and commissions and ₦1.7 billion from diverse other operations. Operating expenses totaled ₦41 billion while the fintech processed ₦100 in operations which resulted in a high cost-to-income ratio of ₦78 for every ₦100.
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The total amount of impairments on loans and other assets at Fairmoney increased by 30% during 2024 to reach ₦59.4 billion. Fairmoney displayed its first year-over-year impairment increase since 2022 after having sustained impairments around ₦45 billion throughout the past two years.
Fairmoney recorded an NPL ratio of 86.8% from its ₦68.4 billion loan book due to rising impairments. Such a high impairment ratio derives from the company’s present loan accounting policies that consider everything funded as impaired until payment is received. The NPL ratio would experience substantial decline because clients are expected to fulfill their timely repayments. Fairmoney shows a positive sign in cost of risk performance but its -49.7% measurement level for loss provisions against loans continues to be high.
The company immediately starts preparing loan provisions once funds are distributed according to Fairmoney. The company demonstrates continuous progress through a positive slope of impairment-to-revenue ratio because they improve their risk assessment systems while using data to refine their underwriting operations. We have performed enhancements to our ethical collection procedures along with our customer profiling systems to enhance the quality level of our portfolio.
Fairmoney’s net interest margin stands at 64.72%, a seemingly healthy level for a lending business. However, this margin relies heavily on high-yield loans with steep interest rates—often around 10% monthly. While this strategy drives short-term profitability, it also heightens credit risk, as reflected in impairments exceeding 85% of gross loans.
The lender’s assets grew by 55% year-on-year to ₦99 billion, mainly driven by a ₦30.4 billion increase in its loan book in 2024. However, its cash on hand fell by ₦2 billion to ₦8.1 billion, while prepayments (loans paid before due) rose sharply from ₦1.3 billion to ₦9.3 billion.Fairmoney’s consumer lending business has strong growth potential but it faces credit risks. While its rapid growth and high asset yields are notable, its long-term sustainability depends on improving underwriting, risk management, and cost efficiency
