OPay’s $1.28 lending problem in Nigeria

Each $10 (₦13,329.7) borrowed from OPay generated $2.55 (₦3,399.07) in loan-financing earnings in H1 2026. The determine contains late-payment consequences, now not simply passion, and provides a glimpse into the earnings lenders wish to quilt the chance of borrower defaults.

The fintech generated $236.12 million from $927.6 million in loans originated in Nigeria, consistent with its public offering prospectus. However OPay put aside $118.36 million for anticipated credits losses, similar to $1.28 (₦1,706.20) for each $10 lent. After provisions, more or less $1.27 (₦1,692.87) remained from each $10 lent.

Mortgage-financing earnings was once similar to twenty-five.5% of originations, towards the Central Financial institution of Nigeria’s 26.5% benchmark rate of interest all the way through the duration. OPay’s determine isn’t the rate of interest charged to person debtors, as earnings contains collected passion and consequences for overdue repayments.

On a ₦280,000 ($210.06) mortgage in the course of the OPay app, TechCabal was once introduced 0% passion for a 15-day reimbursement duration, 18.3% for 30 days, and 16.8% for 60 days. The charges follow to all the reimbursement duration, now not every year.

The fintech’s determine gives a glimpse into the economics of virtual credits in Nigeria’s shopper lending marketplace, estimated to be price $2.1 billion. Lenders should value loans to hide defaults, investment and running prices, with debtors who pay off on time probably bearing a part of the price of lending to people who don’t.

The corporate classifies loans which are 90 days overdue as non-performing and fees them off at 120 days overdue. Recoveries on up to now written-off loans cut back credit-loss expense.

Nigeria’s standard banking framework classifies loans as non-performing after 90 days overdue, doubtful after 180 days, and as losses after 360 days. OPay reported an NPL ratio of four.3% as of June 30, 2026, in comparison with 8.03% for the banking trade, above the prudential threshold of five%.

However OPay’s 120-day charge-off coverage complicates comparisons with banks that classify loans as losses after 360 days. Loans OPay writes off may just stay on a financial institution’s books for some other 8 months, probably making OPay’s NPL ratio seem decrease. The corporate does now not divulge the worth of loans charged off between the ones thresholds, making it not possible to estimate what its ratio can be beneath a 360-day timeline.

The economics of OPay’s lending

Lending is OPay’s greatest earnings circulate, producing 55.29% extra earnings than its next-largest trade. However anticipated credits losses are rising quicker than lending earnings.

In H1 2026, it originated $927.6 million in loans, greater than 3 times the $305.1 million it originated a 12 months previous. Mortgage-financing earnings grew 167.9% year-on-year to $236.12 million, whilst provisions for anticipated credits losses greater by way of 210.3%.

Provisions ate up 50.2% of loan-financing earnings in H1 2026, up from 41.0% a 12 months previous. For each $10 OPay earned from lending, it put aside $5.02 to hide anticipated credits losses, leaving much less earnings to hide different prices. The fintech is making a bet that an expanding shift in opposition to service provider loans will cut back its credits possibility profile over the years. 

OPay units rates of interest in accordance with debtors’ profiles and possibility checks. Its loan-financing earnings incorporates passion collected over the mortgage time period the usage of the efficient passion approach, along consequences for overdue instalment bills. Provisions, on the other hand, are estimates of anticipated losses, now not the general quantity the corporate will fail to get better. Exact losses is determined by defaults, next recoveries, and adjustments in the ones estimates.

OPay has a considerable pool of money to fund its lending. As of June 30, 2026, it held $918.7 million in money, money equivalents, and momentary investments. “As of June 30, 2026, we didn’t have credits amenities supplied by way of monetary establishments,” the corporate mentioned in its prospectus.

OPay expects the proceeds from its public providing and concurrent non-public placement, along with present money and expected running money flows, to hide its money wishes for the following three hundred and sixty five days.

OPay’s artwork of lending

OPay’s loans normally closing round 100 days. The corporate makes use of transaction knowledge to evaluate debtors who would possibly lack standard credits data. In 2025, fintech unicorn Moniepoint allotted ₦1 trillion ($750.20 million) in loans the usage of transaction knowledge.

OPay mentioned its per month lively customers made a median of 209 pockets bills a month. It has leveraged greater than 200 billion credits and fiscal knowledge issues and just about 50 billion behavioural knowledge issues to evaluate debtors, combining transaction histories with credits data, source of revenue knowledge and third-party resources.

The corporate runs greater than 5,000 machine-learning fashions and variants to evaluate creditworthiness, set mortgage limits, value loans and observe delinquency. Its fashions draw on tool intelligence, transaction patterns, social graphs and user-consented monetary SMS knowledge. AI equipment additionally beef up collections: WhatsApp reminders progressed restoration charges by way of 3.5% in Indonesia, with rollout to Nigeria underway. OPay warns that deficient knowledge, converting borrower behaviour, fraud and type glide can weaken its predictions and building up credits losses.

The method is scaling. OPay originated $1.56 billion in loans in Nigeria within the three hundred and sixty five days to June 30, 2026, and quarterly distinctive debtors reached 6.7 million in Q2 2026, greater than seven instances the quantity in Q1 2024.

Mortgage financing accounted for fifty.55% of OPay’s $467.06 million in overall source of revenue in H1 2026. The corporate additionally reported $90.87 million in running source of revenue. 

OPay’s lending trade stays small relative to established Nigerian banks. Warranty Agree with Retaining Corporate (GTCO), for example, reported a mortgage guide of ₦3.14 trillion ($2.36 billion) in 2025. The figures don’t seem to be without delay related: the 2 companies function at other scales, and their lending fashions fluctuate

OPay may be increasing into new lending merchandise. It introduced a purchase now, pay later (BNPL) product in September 2025 and allotted $99 million in service provider loans and $5 million in the course of the BNPL product. Service provider lending may just lend a hand OPay organize credits possibility as a result of common trade transactions supply observable alerts of reimbursement capability.

However as OPay expands its lending trade, it should additionally cope with the selling ways used to draw and get better loans. Promoting and advertising bills rose 104.67% to $78.68 million in H1 2026. A TechCabal record in April 2026 known OPay, EaseMoni, and OKash (each tied to OPay) as main resources of court cases about harassment from virtual lenders, together with power calls.

OPay reported a buyer acquisition price (CAC) of $1.90 in H1 2026, with reasonable per month earnings consistent with person at $1.70 in Q2 2026. 

In its prospectus, OPay says it limits advertising touch to two times every week and provides distressed debtors counselling, fee deferrals and penalty or passion waivers.

True scale calls for transferring past surface-level integrations to tough execution. We’ve filtered the noise out of Moonshot 2026, optimising the convention strictly for high-calibre connections between startup founders, world monetary operators, endeavor leaders and people rewiring Africa’s technical frameworks.
Get 20% off Early Bird tickets for a limited time.