Nigeria’s rapidly expanding fintech sector is reshaping the small business landscape by driving the formalisation of millions of micro and small enterprises previously operating entirely in cash.
Across urban centres such as Lagos, Ibadan and Port Harcourt, small retailers, transport operators and service providers are increasingly adopting digital wallets and mobile point-of-sale systems. These tools are not only facilitating payments but creating financial records that fundamentally change how businesses interact with the wider economy.
From cash-based survival to structured operations
Historically, Nigeria’s informal sector thrived outside the banking system, limiting access to credit, insurance and legal protection. Digital payment adoption now creates transaction histories that enable lenders to assess risk more accurately.
As a result, small businesses are gaining access to short-term working capital, inventory financing and equipment loans for the first time. This shift allows firms to plan, expand and hire with greater confidence.
Economic and fiscal implications
Formalisation has broader macroeconomic benefits. Registered businesses are more likely to contribute to tax revenues and comply with labour standards. Economists note that this gradual expansion of the formal economy strengthens fiscal capacity without imposing abrupt regulatory burdens.
Digital finance also improves transparency, reducing fraud and increasing trust between businesses, suppliers and customers.
A structural transformation underway
Rather than replacing traditional banking, fintech platforms are acting as an entry point into the formal financial system. Analysts view this as a long-term structural transformation that could significantly improve productivity across Nigeria’s SME sector.
Newshub Editorial in Africa – 2 January 2026
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