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Kuda Group, the parent company of Kuda Microfinance Bank Limited, has reported a loss of £25.227 million (N13.18 billion) for the financial year ending December 31, 2022. This loss comes despite the company achieving a total income of £8.143 million.
The increase in losses was attributed to higher staff costs and other operating expenses as the company scaled operations. “The wider loss in 2022 is due to the increase in staff costs and other operating expenses, relative to revenue as the company successfully scales,” Kuda stated in its financial report reviewed by MoneyCentral.
As of December 31, 2022, Kuda Group’s total assets stood at £120.6 million (N63 billion), a significant increase from £92.46 million (N48.33 billion) in 2021. Kuda Microfinance Bank Limited (Kuda MFB) accounted for over 79% of the Group’s total assets, with £94.2 million (N49.24 billion).
Kuda MFB, which operates as a digital-only bank, reported having 4.9 million registered users on its app by the end of 2022, up from 2.4 million users in 2021. The Group’s revenue, consisting of fees, commissions, and interest income on loans, grew by 886% despite the devaluation of the Naira in 2022.
However, Kuda MFB faced regulatory challenges, including a £191,306 (N100 million) fine by the Central Bank of Nigeria (CBN) for infractions related to loss levels, corporate governance, and compliance matters.
Adding to the financial challenges, KLSA LLP, the Group’s auditor, issued a disclaimer on Kuda’s FY 2022 accounts. Ketan Shah, a Senior Statutory Auditor at KLSA LLP, noted the inability to obtain sufficient audit evidence regarding Kuda MFB’s financial information. This disclaimer raises concerns about the carrying value of Kuda MFB’s assets and liabilities, which constitute a significant portion of the Group’s total assets.
