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 company which processes over $17 billion in transactions monthly, said the report provides an in-depth look at how its digital payment solutions and innovative business support tools are transforming the commercial landscape for thousands of traders and businesses in the region.

The case study, titled “How Moniepoint is Driving Trade in West Africa’s Largest Market,” draws on extensive field research and firsthand accounts from market participants. It highlights the unique challenges of operating in Onitsha’s dynamic environment and demonstrates how Moniepoint’s technology is enabling seamless transactions, improving access to financial services, and fostering trust among merchants.

Commenting on the report, Tosin Eniolorunda, CEO and Co-founder of Moniepoint Inc, said:

“Our mission has always been to empower businesses with the tools they need to thrive. This case study is a testament to the impact of digital innovation in Africa’s most vibrant markets. By providing reliable, accessible, and secure financial services, we are not just facilitating transactions-we are helping to build stronger, more resilient communities.”

Key findings from the report reveal that Moniepoint’s integrated platform has significantly reduced payment bottlenecks, enhanced business efficiency, and contributed to the growth of small and medium enterprises (SMEs) in the market.

The study also explores the enduring apprenticeship system in Onitsha and how digital tools are supporting the next generation of entrepreneurs.

Excerpts from the Report’s Findings:

Onitsha Market as a Living Business School:

Beyond trade, Onitsha functions as a structured business incubator through the Igbo apprenticeship system.

Generations of entrepreneurs are created, transferring wealth, trade secrets, and business skills without formal academic structures.

Payments Infrastructure as a Catalyst for Safety and Speed:

Transitioning from cash to digital payments (led significantly by Moniepoint) dramatically reduced risks of theft, enabled faster transactions, and eliminated costly bank runs — unlocking smoother business flows in one of Africa’s busiest markets.

Massive Digital Payment Penetration at the Grassroots:

Today, 2 out of 3 in-person payments in Onitsha are via Moniepoint POS terminals. This shows that digital finance can deeply penetrate highly traditional, informal economies when solutions are hyperlocal, reliable, and frictionless.

Access to Instant Credit as a Growth Accelerator:

Merchants can now leverage digital transaction histories to secure fast loans, allowing them to stock up quickly when market prices fluctuate — a crucial competitive advantage in volatile, high-volume markets.

Hyperlocal Support and Trust as the Differentiator:

Moniepoint’s dedicated local account managers who understand cultural nuances (even language) have been critical to building trust — proving that digital financial services must be deeply embedded in community realities to succeed.

This latest case study adds to the growing pool of thought leadership materials curated by Moniepoint for the benefit of stakeholders – regulators, investors and the general public aimed at improving their understanding of the financial services ecosystem in Nigeria.

Past case studies have explored family owned businesses, community pharmacies, women owned businesses and the Informal Economy Report.

Moniepoint’s ongoing commitment to financial inclusion and economic development has positioned it as a catalyst for growth across Nigeria and beyond.

The company processes over $17 billion in transactions monthly and continues to expand its reach, supporting millions of businesses with payments, banking, credit, and business management solutions.

The full case study is available for download on the Moniepoint website.