NCBA Loop is reinventing neobanking by pioneering Kenya’s embedded finance revolution

Kenya’s digital banking landscape is shifting, and NCBA Loop is leading this transformation. Launched as a digital bank in 2017, Loop has pivoted to a broader financial infrastructure model, embedding credit and payments directly into transactions. This evolution aligns with a global shift toward embedded finance, where banking services integrate into everyday commercial activities rather than as separate processes.

Loop’s new model enables users to take loans and buy items in the same transaction—removing the traditional separation between lending and payments. Instead of applying for a loan before making a payment, credit becomes an automatic part of the transaction, mirroring the success of Safaricom’s M-PESA overdraft facility, Fuliza, and the growing Buy Now, Pay Later (BNPL) trend in Kenya.

“We are both developing our solutions and observing trends here at home and in other parts of the world that we consider relevant,” said Eric Muriuki, CEO of Loop, in an interview with TechCabal.

Loop, one of Kenya’s earliest digital banks, helped popularise neobanking in the country. However, the market has grown, with well-funded competitors like Ecobank-backed Fingo, Branch MFB, Umba, and Payless. In response to these competitive pressures, Loop is expanding beyond digital banking into a payments and credit infrastructure model.

“Payments and credit will not be two different businesses, particularly short-term credit, because short-term credit is typically used to pay for something,” Muriuki explained. “You see a bit more embedding of credit into payment journeys.”

Businesses also benefit from embedded finance, particularly in trade and commerce. “If you want to pay a supplier in China for imported goods, that payment transaction can have a credit structure embedded into it,” Muriuki added.

Loop’s shift toward embedded finance mirrors a trend across industries where payments, credit, and insurance integrate into wider commercial transactions. APIs and improved internet access are enabling the creation of sector-specific financial solutions in agriculture, healthcare, and education.

“You’ll see more language like financial infrastructure,” Muriuki said. “I could be an agri-tech company integrating technology into agriculture, but I then use financial infrastructure as a service, plugged into my agri-tech solution. That technology helps me register farmers, issue fertiliser, and distribute seeds—but the payments and credit linked to those transactions are services I consume from a financial infrastructure provider.”

The future of neobanking in Kenya

Muriuki predicts that while the distinction between neobanks and traditional banks will persist, the boundary will become thinner. Digital platforms will continue gaining market share in consumer banking, especially among a new generation of digitally native customers.

Unlike older customers who transitioned from traditional banking to digital services, these users begin their financial journey in the digital space. They interact with multiple financial service providers through apps rather than maintaining a relationship with a single bank.

For corporate clients, embedded finance will reshape value chains. Businesses will still maintain relationships with traditional banks, but their financial operations will be deeply integrated with digital platforms. However, regulatory constraints—particularly around deposit protection—will ensure that banks remain a central part of the financial system, even as fintech-driven solutions distribute capital more efficiently.

“Of course, corporates will remain corporates—that won’t change much,” Muriuki said. “But as ecosystem solutions gain prominence, you’ll see that porous boundary I was talking about, where corporates remain in banking, but their value chain is firmly established on the digital platform side. That line will never fully disappear because regulation will keep it in place.”

Loop’s transformation highlights the broader direction of Kenya’s financial sector. As embedded finance gains traction, the role of banks is shifting—from standalone service providers to integrated financial infrastructure powering digital commerce.