Moniepoint’s 2025 Informal Economy Report reveals what most Nigerians already live, small businesses are earning more but gaining less.

Sixty-five percent of Nigeria’s informal businesses across the country reported an increase in revenue over the past year, but only 47% saw a growth in profit. At the same time, 79% said the cost of doing business had increased, driven mainly by higher supplier prices, transport expenses, and the relentless depreciation of the naira.

This contradiction, of higher earnings but shrinking returns, captures the state of the Nigerian economy today.

Growth Without Profits

The country’s informal economy looks alive. The markets are filled with activities, goods are moving daily, artisans are finding work, and service providers are busy, but look deeper, they are all exhausted. 

The report stresses how traders, among others, watch their margins evaporate, unable to keep pace with inflation. “The cost of doing business has increased for 80% of informal businesses in that same period. A goal for us in this report was to establish context like this: helping key stakeholders see and understand the effects of every decision made on informal businesses, and giving them a voice where they’ve previously gone largely unheard,” said Tosin Eniolorunda, founder and group CEO, Moniepoint Inc.

Unsurprisingly, 44% of Nigeria’s informal businesses make less than ₦20,000 daily in revenue, and most make profit of only ₦10,000 to ₦20,000 a day. Business owners skip meals to restock, workers forgo pay to keep their jobs.

And for women-owned businesses, 41% of women earn below ₦10,000 daily, compared to 34% of men. It tells us that Nigeria’s informal economy, while inclusive in appearance, still aligns with the inequalities of the formal one.

Survival Mode Economics

We see an economy built on individuals, isolated, unstructured and overstretched, highly fragmented. Eighty-five percent of informal businesses are sole proprietorships, usually run by one person who handles everything from supply to sales to bookkeeping. Only 40% employ labour, and when they do, it’s typically one to three workers. It’s not that they don’t want to expand, it’s just that they can’t afford to.

Record keeping is also informal. Seventy-five percent of business owners say they track their income and expenses, but 38% disclose they do so mentally, without written or digital records. Most lack a clear view of their cash flow, making them invisible to lenders and policymakers.

That lack of structure limits access to credit, planning, and long-term growth.

Credit access is also deteriorating as 51% of informal business owners have never taken a loan and have no intention to do so, compared to 30% in the last report.

Fear of debt, high interest rates, and lack of collateral keep them shut out of the financial system. Among those who borrow, only 6% have ever secured loans above ₦1 million, with digital lenders and microfinance banks emerging as their most common sources.

The result is a self-sustaining cycle of informality; low records, low credit, low growth.

Inflation and the Cost of Resilience

Inflation has become the most punishing cost of doing business in Nigeria. It’s the invisible tax that eats into every sale, every restock and every saving. 

Dr Nurudeen Abubakar Zauro, technical adviser to the President on Economic and Financial Inclusion, explained:

“With the removal of fuel subsidies and devaluation of the Naira by the monetary authorities, inflation rate increased from 22.41% in May 2023 to a climax of 34.8% by December 2024 according to the data from the National Bureau of Statistics (NBS). In July 2025, inflation rate declined drastically to 21.88%.”

For informal businesses, that drop brings a little comfort. Inflation may have eased statistically, but prices are still suffocating. The report found that while 74% of business owners save money, 69% save less than ₦50,000 monthly, and 42% say their savings cannot last a month if their business income stops.

Even the much-celebrated digital transition has not fully arrived. While many businesses use transfers to restock, most still prefer to receive payments in cash, and only 16% say digital transactions account for more than half of their total revenue. The infrastructure may be modern, but consumer behaviour is still very traditional and survival rarely leaves room for experimentation.

Policy and Structural Limitations

For an economy that contributes around 65% of the nation’s GDP and supports over 80% of jobs, the informal sector is strangely underserved by policy. It sustains Nigeria, but without protection. 

Dr Chinyere Almona, director-general of the Lagos Chamber of Commerce and Industry, noted:

“The most pressing challenge, therefore, is misaligned policy frameworks that inadequately balance revenue generation with sectoral resilience, inadvertently driving many players further into informality. What is needed is not merely regulation, but coherent regulatory empathy, a framework that recognises informality as a springboard for innovation, employment, and resilience, rather than a nuisance to be managed.”

Despite recent policy initiatives such as the Nigeria Consumer Credit Corporation (CrediCorp), the Nigeria Tax Administration Act (NTAA), and small business registration campaigns, the report disclosed that formalisation is still out of reach for most small business owners, expensive, bureaucratic and unrewarding. 

“Although many informal businesses are unfamiliar with the process of registering their business, the assumption is that it is costly and complex. These assumptions make them unlikely to attempt the process,” said Zauro.

It’s not a lack of will, but a lack of trust. 

From Resilience to Reform

If there’s one thread that ties Moniepoint’s findings together, it’s that resilience is not enough. The informal sector needs access, not a round of applause.

In her commentary, Dr. Almona called for a shift in thinking. “Policies must pivot from punitive compliance models to incentive-driven, inclusion-focused strategies to effectively support growth and formalisation.”

That means simplifying registration, improving access to finance, expanding digital infrastructure, and providing targeted support for women entrepreneurs; all areas where private sector players like Moniepoint, SMEDAN, and IFC are already collaborating and this must continue in order to bridge the trust gap between the street and the system. 

Moniepoint’s report measures Nigeria’s informal economy, exposing its weaknesses and the fatigue of millions of businesses. Nigerians are counting coins under candlelight, calculating what can wait till tomorrow. Informal businesses are the backbone of the economy, but they’re carrying too much weight without support.

Until policymakers, financiers, and regulators begin to design for their reality, not their assumptions, Nigeria’s growth will stay uneven. The country’s entrepreneurs are doing their part. It’s time the system met them halfway.

The investment is aimed at improving access to credit for low-income public sector workers who are usually excluded from formal banking systems.

The three southern African countries continue to face serious economic challenges, including limited job opportunities, inadequate healthcare and education systems, and growing pressure from climate-related shocks. With international aid becoming less predictable, many households have struggled to sustain livelihoods or fund small-scale ventures.

Swedfund’s new funding seeks to close this gap by enabling more civil servants to access personal and business loans that support daily living and small enterprise growth. According to the organisation, these loans are not just about access to money but about fostering resilience and stimulating community-level economic development.

“With this loan we increase the possibilities for low-income individuals to secure financing that supports their livelihoods and productive activities, such as starting a small side business, expanding farming, covering education costs or building a house. This contributes to human development for many families and, in turn, fosters potential for local economic growth and more jobs,” said Jane Niedra, investment director of Financial Inclusion at Swedfund.

Select Africa’s customer base largely consists of civil servants, including teachers, nurses, and local administrators, who often find it difficult to obtain loans from traditional banks due to perceived high risk or lack of collateral. The company provides payroll-based lending, allowing borrowers to repay directly from their salaries, reducing default risk and enabling them to build a formal credit history over time.

Founded in 1999 with its first branch in Eswatini, Select Africa has since expanded its footprint across Lesotho, Malawi, Uganda, and Kenya. The Group now operates 19 branches and manages a gross loan book of about $108 million.

Through this partnership, Swedfund and Select Africa aim to unlock opportunities for thousands of underserved public workers, strengthening household incomes, encouraging entrepreneurship, and supporting the broader financial inclusion agenda in sub-Saharan Africa.

Per reports, while obtaining regulatory approval could extend over a year, the move reveals Moniepoint’s goal of evolving from its current microfinance status to a fully-fledged commercial bank, ultimately redefining Nigeria’s financial services sector.

Securing a commercial banking licence would open new revenue streams for Moniepoint, including foreign currency transactions and treasury management—two areas known for driving stable income in the banking industry. 

Again, the licence would enable Moniepoint to establish physical branches across the country, potentially increasing consumer trust in an environment often filled with low confidence in financial institutions. 

Currently, the demand for more accessible and efficient banking services is on the rise and Moniepoint’s goal aligns with this.

The ability to handle foreign transactions could be a financial game-changer for Moniepoint, tapping into a segment that contributed trillions in revenue for Nigeria’s largest banks within the past year. 

Such a licence would make Moniepoint a competitor not just to fintech companies like OPay but also to long-established commercial banks, as it would become the first Nigerian fintech to achieve this status. 

The strategy is similar to the approach taken by Latin American fintech giant Nubank, which pursued a banking licence in Mexico after achieving growth in Brazil.

The licence would allow Moniepoint to move beyond the constraints of its microfinance designation, which limits its operations primarily to Nigeria’s South-West and restricts certain high-value banking services. 

By contrast, a commercial banking licence would enable Moniepoint to offer services traditionally limited to commercial banks, including corporate banking and sophisticated investment solutions. 

This shift could disrupt the market, especially as many of Nigeria’s leading banks have been criticised for inadequacies in service delivery to their vast customer bases.

Moniepoint’s move to secure the licence began in early 2024, soon after appointing Bayo Olujobi, formerly of Stanbic IBTC, as its Chief Financial Officer. 

The fintech has since ramped up its compliance strategy, adding multiple roles in compliance and fraud prevention—a necessary step to align with Nigeria’s increasingly tough fintech regulations. 

This compliance focus also reflects the Central Bank of Nigeria’s deepened watch of fintech operations since late 2023, which has led to challenges for many startups in the sector.

In addition to the regulatory issues, Moniepoint must also meet financial and infrastructure requirements to qualify as a commercial bank. 

With an estimated $30 million needed for the minimum capital requirement for a regional licence, Moniepoint’s recent $110 million funding round ascertains its preparedness to meet these demands. 

Physical branches must also be established, built with facilities such as strong rooms and loading bays, to comply with regulatory standards.

The transition to commercial banking, however, brings advantages that align well with Moniepoint’s growth initiatives.

Diversifying its product offerings could solidify its presence in Nigeria’s crowded fintech space and also boost its credibility in the eyes of consumers and regulators.

Added to this, as commercial banks typically earn higher profits from corporate clients than retail, Moniepoint would be better positioned to compete in this space, potentially attracting more corporate accounts.

Moniepoint’s journey, though late to the commercial banking space with 24 established commercial banks already operating, shows the company’s strategy of using technology to disrupt traditional banking. 

Leveraging its existing agent network and digital platforms has enabled Moniepoint to make success in agency banking and retail services, a foundation it aims to build upon if granted the licence.

In a sector primed for disruption, Moniepoint’s potential entry into commercial banking could cause a competitive shift, challenging both established players and rival fintech firms. 

It could redefine the relationship between technology-driven solutions and traditional banking in Nigeria, offering consumers more options in a dynamic financial environment.

Approximately 7,000 employees will benefit from this initiative, with junior staff receiving a 25 percent salary increase and senior staff receiving a 12.5 percent increase.

The bank aims to enhance productivity and help its staff cope with the challenges posed by rising fuel, electricity, and other prices.

According to Oluremi Akande, the Head of Marketing and Communications at LAPO Microfinance Bank, the salary increase is one of several measures implemented by the bank to support its staff during these difficult economic times.

The bank remains optimistic about the improvement of the current economic conditions and is committed to employing superior strategies to ensure business continuity and sustainability for the benefit of all stakeholders.

LAPO Microfinance Bank has a strong institutional culture that values excellence and service. In the previous year (2021-2022), over 900 staff members were promoted to different ranks within the institution.

The bank also holds the annual LAPO Staff Meritorious and Long Service Awards to recognize and reward outstanding and loyal employees.

Staff welfare remains a top priority, and the bank is committed to implementing strategies that support this objective.

In 2021, LAPO Microfinance Bank was ranked as the fifth largest employer of labor in Nigeria by StatiSense.

The bank has been dedicated to its mandate of socio-economic empowerment for over 30 years, focusing on assisting low-income households and micro, small, and medium enterprises in Nigeria

Among the microfinance banks affected by this action are Atlas Microfinance Bank, Bluewhales Microfinance Bank, Everest Microfinance Bank, Mainsail Microfinance Bank, Nopov Microfinance Bank, Ohon Microfinance Bank, Premium Microfinance Bank, and Statesman Microfinance Bank.

Other institutions include Manny Microfinance Bank, Reality Microfinance Bank, Osina Microfinance Bank, Zikado Microfinance Bank, Taraba Microfinance Bank, and Ndiagu Microfinance Bank, among several others.

Additionally, the licenses of the finance companies HHL Invest & Trust Limited, TFS Finance Limited, and Treasures & Trust Limited have been revoked by the CBN. Furthermore, four primary mortgage banks that lost their licenses are Resort Savings & Loans, Safetrust Mortgage Bank, Adamawa Savings & Loans, and Kogi Savings & Loans.

According to the Federal Government of Nigeria Official Gazette, the CBN stated that these Microfinance Banks, Finance Companies, and Primary Mortgage Banks have ceased to engage in the business activities for which their licenses were granted for a continuous period of six months within Nigeria.

The Gazette, signed by CBN Governor Godwin Emefiele, also revealed that the affected institutions failed to meet the conditions and obligations set by the CBN at the time of granting their licenses. These obligations are in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020, Act No. 5.

In his statement, Emefiele exercised the powers conferred on the Central Bank of Nigeria under Section 12 of BOFIA 2020, Act No.5, officially revoking the licenses of the Microfinance Banks, Finance Companies, and Primary Mortgage Banks listed in Schedules I, II, and III, respectively, as attached to the report

Small and medium-sized businesses are the focus of Infinity Microfinance Bank Limited, which also offers services including modest business loans and the mobilization of small savings.

The bank will have the chance to obtain short-term financing from the Nigerian CP market thanks to the CP Program.

According to Oludotun Adewunmi, Managing Director of Infinity Microfinance Bank Limited, the bank announced the quotation of its N5 billion commercial paper issuance program on FMDQ Securities Exchange Limited.

“The CP program is an important strategic move for the bank towards achieving its mandate of supporting the growth of low-income households as well as micro, small and medium-sized enterprises across Lagos State.

“The registration of this CP program, in addition to allowing Infinity Microfinance Bank to broaden its sources of funding, has provided the bank with a platform to raise short-term finance, within the CP program limit, from the Nigerian debt markets when it deems suitable,” Adewunmi said.

Managing Director, FSDH Capital Limited (FSDH Capital), Tolu Osinibi, said FSDH Capital was delighted to have advised Infinity Microfinance Bank on this landmark registration.

“This is the first CP program to be registered by a microfinance bank on FMDQ Securities Exchange Limited and without a doubt sets the pace for other duly licensed and regulated microlending institutions seeking to raise capital via the issuance of commercial papers.

“The admission on the FMDQ Exchange platform will deliver maximum market visibility and enhanced liquidity of CPs issued under the CP Programme.

We are thankful to the Board and management of Infinity Microfinance Bank Limited for trusting FSDH Capital to execute this landmark transaction and provide the expert guidance required to navigate the challenges faced by first-time issuers in the markets,” Osinibi said.