Nigeria Deposit Insurance Corporation (NDIC) covers up to NGN 5 million per depositor per CBN-licensed Deposit Money Bank, and NGN 2 million per depositor per Microfinance Bank / Primary Mortgage Bank. PSB (Payment Service Bank) cover follows the deposit-money-bank ceiling but verify the licence class — fintech wallets are often not PSB-licensed.
Primary source: https://ndic.gov.ng/
A CBN-chartered MFB — not a partner-bank fintech
Kuda is not a fintech sitting on top of a partner bank. Kuda Microfinance Bank Limited holds a Central Bank of Nigeria Microfinance Bank (MFB) licence — a chartered class of Nigerian deposit-taking institution, regulated and supervised by the CBN, with annual returns, prudential ratios, capital-adequacy thresholds, and on-site examinations on the same supervisory cadence as any other licensed MFB. The depositor-of-record relationship runs directly to Kuda Microfinance Bank Limited. There is no intervening payment-service-bank wrapper, no partner-bank sponsor, and no fintech-on-top-of-a-bank layer between you and the chartered entity. What the MFB licence class is not: it is not the same as a Deposit Money Bank (DMB) licence — the full commercial-bank charter held by GTCO, Access Bank, UBA, Zenith, and the other tier-1 Nigerian banks. The MFB class permits a narrower set of activities (smaller permitted single-obligor limits, restrictions on FX dealing, geographic-tier constraints under the CBN MFB framework) and carries a smaller statutory NDIC deposit ceiling. This is the structural fact most Kuda marketing glosses; it is also the structural fact most reviewers miss.
NDIC cover at the MFB ceiling — NGN 2M, not NGN 5M
Eligible deposits at Kuda Microfinance Bank Limited are protected by the Nigeria Deposit Insurance Corporation (NDIC). The statutory ceiling for the MFB licence class is currently NGN 2,000,000 per depositor per microfinance bank. This is the figure under the NDIC Act 2023 framework and NDIC's published policy for microfinance institutions. It is materially below the NGN 5,000,000 ceiling that applies to Deposit Money Banks (the full commercial-bank licence class). Some older Kuda marketing copy and third-party reviews cite the NGN 5M figure; that figure is the DMB ceiling and does not apply to Kuda. The naira-denominated ceiling is fixed by statute and only re-set when NDIC reviews its framework — but the real-USD value erodes with naira depreciation. The CBN devaluation cycle of June 2023 to mid-2024 widened the gap between the official and parallel exchange rates, and the official rate alone moved the USD value of the NGN 2M ceiling materially. At an indicative NGN 1,500–1,600 per USD on the official window in 2026, the NGN 2,000,000 microfinance ceiling translates to roughly USD 1,250–1,330. For high-balance customers the binding question is not "Is Kuda insured?" but "How much of my balance does that ceiling actually cover today?" See the NDIC explainer for product eligibility.
UK Kuda Technologies is a separate entity
Kuda Technologies Ltd. is the UK arm of the Kuda group and is a separate legal entity under a separate regulator. It is authorised by the UK Financial Conduct Authority (FCA) as an electronic money institution (EMI) under the Electronic Money Regulations 2011 (EMR 2011), and serves diaspora customers holding GBP and converting into NGN. The legal posture is fundamentally different from the Nigerian entity. EMI safeguarding under EMR 2011 means customer GBP is held in segregated accounts at UK partner banks rather than insured up to GBP 85,000 by the FSCS. If the EMI fails, the safeguarding mechanism is meant to ring-fence client money so it can be returned through an insolvency process; that is not the same as a deposit-insurance entitlement, and recovery timing and completeness depend on how cleanly the safeguarding accounts segregate. The takeaway: the Nigerian deposit-protected entity is Kuda Microfinance Bank Limited; UK Kuda Technologies is the diaspora-onboarding-and-FX rails, not the deposit-protected book.
NGN-only by design — Nigerian FX context
Kuda Microfinance Bank Limited is an NGN-denominated institution. The CBN MFB licence does not authorise the institution to hold or settle FX accounts on a retail basis the way a DMB does, and Nigerian foreign-exchange controls (CBN circulars, BVN-linked FX limits, official-window allocation rules) constrain how naira can be converted into hard currency. The official-vs-parallel rate divergence that defined 2023–2024 narrowed in 2026 but has not vanished; depositors holding all of their liquidity inside an NGN MFB are exposed to both the cover-ceiling question and the FX-conversion question simultaneously. For diaspora customers the workaround is UK Kuda Technologies for GBP holding and corridor delivery — but as set out above, that is a different legal posture, not deposit-insured naira.
What happens if Kuda fails — NDIC payout
In the event of a Kuda Microfinance Bank Limited failure, the NDIC claim path is the standard Nigerian microfinance-bank resolution mechanic. The CBN withdraws the licence; NDIC steps in as resolution authority and pays eligible depositors up to NGN 2,000,000 per depositor within the published NDIC settlement window. Historical Nigerian MFB closures have generally seen NDIC verified-claim payouts begin within weeks and complete over months, depending on the cleanliness of the failed institution's records. Balances above NGN 2M sit behind the cover and become general claims against the estate, recovered (if at all) from the orderly wind-down of assets. UK Kuda Technologies GBP balances do not route through NDIC; recovery in that scenario depends on the EMR 2011 safeguarding framework administered through the UK insolvency process, which is the structural caveat for diaspora-only users.
Verdict
Kuda is structurally clean for the MFB licence class: a chartered CBN Microfinance Bank, supervised on the standard MFB cadence, with a direct NDIC cover relationship and no partner-bank wrapper. The binding constraint for high-balance users is not the chartered status — it is the cover ceiling itself. NGN 2,000,000 per depositor is the MFB ceiling (NOT the NGN 5M DMB ceiling), and naira depreciation has compressed its USD value into roughly four-figure territory. For everyday balances it is a real chartered relationship with real statutory protection; for tier-1-balance use cases the right comparison is a Deposit Money Bank, not another microfinance bank. UK Kuda Technologies is a useful corridor product for diaspora GBP customers but should be read as an FCA EMI, not a second Kuda deposit account.
NDIC cover applies to CBN-licensed Deposit Money Banks (NGN 5M ceiling) and Microfinance / Mortgage Banks (NGN 2M ceiling). Fintech wallets operating without a deposit-bank licence are NOT NDIC-insured. Verify the licence class with the Central Bank of Nigeria.