Moniepoint, one of Nigeria’s leading fintech companies with an extensive agent network, has released its inaugural informal economy report. The report provides valuable insights into the financial behaviors and digital payment trends within Nigeria’s informal economy, based on data gathered from over 2 million businesses that joined the platform between 2019 and 2024. The findings reveal significant shifts in how businesses in the informal sector are engaging with digital financial services, offering a glimpse into the evolving role of fintech in the country.
Card Payments and Digital Payment Growth in Nigeria’s Informal Economy
One of the key takeaways from Moniepoint’s report is the dominance of card payments in offline transactions. The survey found that approximately 80% of the 2 million businesses surveyed prefer using cards for in-person payments, compared to online transfers, which remain the most common form of digital payment. This shift towards card payments highlights the growing acceptance of digital financial services in Nigeria’s informal economy, a trend accelerated by the 2023 cashless policy. The scarcity of cash during this period pushed many Nigerians to adopt digital payment methods, a change that persisted even after the policy was reversed. In 2023, Moniepoint processed over 5.2 billion transactions, cementing its role as a major player in the country’s daily financial activities.
The Growing Influence of Loan Apps and Digital Savings Platforms
The report also reveals a growing preference for loan apps over traditional banks. In a country where credit usage is still relatively low—standing at just 6%—Nigerian businesses are turning to digital lending platforms as a viable alternative to commercial banks, which often do not offer loans to small businesses and individuals. While borrowing from friends and family remains the most common source of credit, loan apps are becoming increasingly popular, surpassing traditional banks as the second choice for financing.
Furthermore, Moniepoint’s report highlights that 92.4% of informal businesses save money, with a strong preference for digital platforms over traditional banks. This trend underscores the expanding role of fintech in the savings habits of Nigeria’s informal sector. Many businesses manage their savings through digital tools, with cooperatives and member-run contributions playing a key role in the informal economy. Fintech companies benefit from these savings by utilizing deposits to offer loans to other customers, further promoting financial inclusion and access to credit.
Young Businesses and the Challenges of Long-Term Sustainability
Another concerning trend revealed by the report is the relatively short lifespan of many businesses in Nigeria’s informal economy. Over 80% of the businesses surveyed were less than five years old, with the majority being between 2 to 5 years old. This suggests that while young businesses are thriving in the early stages, they may face challenges in achieving long-term sustainability, which could impact the broader economic landscape in the future.
