By Oyewole Sarumi
When Moniepoint published its inaugural Impact Report in July 2026, the headlines were predictable: “Fintech disburses $700 million in loans to MSMEs.” Impressive. Worthy of attention. But if we stop at the headline, we miss the real story—and more critically, we miss the real opportunity.
The report revealed something far more significant than a successful fintech company’s annual performance. It revealed that for three out of every four businesses that borrowed from Moniepoint in 2025, this was the first formal business credit their enterprise had ever accessed. Businesses that received credit subsequently recorded a 36 per cent increase in average transaction value. Women accounted for 36 per cent of the loan portfolio, well above the industry benchmark of 15 to 25 per cent and women borrowers recorded a default rate 2.5 times lower than men. Meanwhile, five million users carried out transactions through Moniepoint’s USSD platform, representing a 500 per cent increase from the previous year.
These are not merely statistics. They are market signals. They are evidence of a structural reality that policymakers, investors and entrepreneurs across Africa ignore at their peril.
The most important insight from this data is not that Moniepoint has built a successful company. It is that Moniepoint’s success has exposed the scale of what remains undone. Africa’s biggest opportunity may not be to build another fintech that serves the informal economy. It may be to build the digital, financial, operational, identity, compliance, data and productivity infrastructure that allows the informal economy to become more productive, more visible, more financeable and eventually more formal, without destroying the flexibility that makes it resilient.
The Scale of What We Are Talking About
Let us first establish the magnitude of the informal economy in Nigeria and across Africa, because without understanding the scale, we cannot appreciate the opportunity.
Nigeria is home to over 39 million Micro, Small and Medium Enterprises, accounting for about 96 per cent of all businesses, contributing 50 per cent to GDP, and employing over 84 per cent of the workforce. The informal sector alone accounts for an estimated 42.5 per cent of GDP and over 80 per cent of all employment. In 2019, the informal sector was valued at ₦86.85 trillion, or 42.5 per cent of GDP, more than double the 2015 estimate.
Across sub-Saharan Africa, the picture is similar. The International Monetary Fund estimates that informal activities account for 25 per cent to 65 per cent of GDP in Sub-Saharan Africa. In countries like Mali, the informal sector accounts for approximately 90 per cent of the economy, employing 91.5 per cent of the workforce and making up between 40 to 60 per cent of GDP. Globally, the shadow economy is estimated at $10 to $13 trillion, roughly 20 to 30 per cent of world GDP.
These numbers tell us something profound. The informal economy is not a marginal phenomenon awaiting formalisation. It is the dominant economic reality for hundreds of millions of Africans. It is resilient, dynamic and indispensable. Yet it operates on margins so thin that a single shock, a health crisis, a currency collapse, a policy misstep, can plunge millions into destitution.
The question is not whether to engage with the informal economy. The question is how.
The Financing Gap: A Problem of Infrastructure, Not Just Capital
Moniepoint’s $700 million in loans is impressive, but it barely scratches the surface. Nigerian MSMEs face an estimated funding gap of $32.2 billion. The World Bank’s FINCLUDE programme, approved in December 2025, aims to mobilise approximately $1.89 billion in private capital and expand debt financing to 250,000 MSMEs, including at least 150,000 women-led businesses and 100,000 agribusinesses. Yet even this ambitious programme acknowledges that fewer than one in twenty MSMEs have access to bank credit; loans are often short-term and costly; and collateral requirements exclude many viable firms.
Here is the critical insight that many miss. The financing gap is not simply a shortage of money. It is a shortage of infrastructure that enables money to flow to the right places. Traditional lenders cannot assess creditworthiness because businesses lack financial records. They cannot underwrite loans because they lack transaction data. They cannot monitor performance because they lack visibility into business operations.
Moniepoint’s achievement was to use transaction data rather than traditional collateral to assess borrowers’ creditworthiness, making loans accessible to businesses excluded from conventional banking. This is the beginning of a solution, not the end of one. The real opportunity lies in building the layers of infrastructure that sit beneath and around credit, the systems that make businesses visible, recordable, bankable and ultimately scalable.
The World Bank’s FINCLUDE programme itself recognises this, aiming to modernise loan appraisal with AI-enabled digital platforms that use better data, strengthen impact measurement, and build capacity for both MSMEs and participating financial institutions. This is not simply about lending more money. It is about building the systems that make lending possible at scale.
The Productivity Gap: Why Capital Alone Is Not Enough
There is a statement in the original material that deserves careful attention: “Nigerian businesses don’t scale not because they lack funding most of the time, but because they lack clear systems and structures.”
This is directionally correct, though it requires qualification. Some businesses genuinely cannot scale because they lack capital. But many more cannot scale because they lack reliable financial records, inventory systems, customer data, standard operating procedures, management information, cost accounting, workforce systems, governance, compliance, internal controls and market intelligence.
Giving ₦10 million to a poorly organised business can simply create a larger poorly organised business. The business may now have more inventory, more employees, more customers and more cash, but still lack the systems to control any of them. This is the productivity gap, and it is arguably more consequential than the financing gap.
Consider the typical informal trader. She has daily sales, inventory turnover, suppliers, customers, mobile-money or POS transactions, expenses, seasonal patterns, repeat customers, credit relationships and location data. Economically, she is generating information every day. But that information is often not structured, not recorded, not analysed and not leveraged. The business exists economically but does not exist adequately in the information architecture of the financial system.
The opportunity is to build a bridge: from economic activity to data, from data to business identity, from business identity to financial history, from financial history to credit profile, from credit profile to business intelligence, from business intelligence to capital, from capital to productivity, and from productivity to formalisation. This is much more powerful than merely creating a lending app.
The Nine Infrastructure Opportunities
The original material identifies eight business opportunities, to which I would add a ninth and expand the framing. These are not merely startup ideas. They are infrastructure opportunities that, if pursued systematically, could transform the economic landscape of Africa.
The first is alternative credit-scoring platforms that use transaction and cash-flow data to help lenders understand SMEs that lack traditional collateral. This is already being demonstrated by Moniepoint’s data-driven approach, but the opportunity extends far beyond one company. The question is how to make alternative credit scoring accessible to every lender and every borrower across the continent.
The second is SME credit passports, portable financial profiles that help informal businesses prove their financial history and creditworthiness. Imagine an African SME Digital Passport that captures business identity, transaction history, cash-flow patterns, inventory turnover, supplier relationships, repayment history, tax records, utility payment history, business location, revenue consistency, operating history and digital payment behaviour. The passport belongs to the entrepreneur, not the lender. This raises important questions around data ownership, consent and portability that policymakers must address.
The third is women-focused fintech platforms that combine finance, bookkeeping, inventory, insurance and business support around specific categories of women-owned businesses. The data is compelling: women borrowers in Moniepoint’s portfolio recorded a default rate 2.5 times lower than men. For 62 per cent of surveyed women entrepreneurs, a Moniepoint loan was the first formal business financing they had ever received. Yet women-led enterprises face higher rejection rates and limited tailored products from traditional lenders. The opportunity is not merely to create a “women’s fintech” but to identify women-dominated economic sectors, retail, fashion, food, beauty, agriculture, healthcare, education, and build sector-specific financial and operational products.
The fourth is industry-specific business operating systems. Not generic accounting software for everyone, but the operating system for Nigerian pharmacies, or for market traders, or for private schools. The narrower the initial market, the deeper the solution can become. A business operating system should integrate accounting, payments, payroll, inventory, customer relationship management, marketing, human resources and analytics into a single platform that answers not just “what is happening in my business” but “why is it happening and what should I do next.”
The fifth is offline-first financial technology. This is not a niche concern. It is a fundamental design principle for Africa. Millions of users carried out transactions through Moniepoint’s USSD platform in 2025. Customers without smartphones executed more than $170 million in transactions through USSD. The African technology stack must be online and offline, USSD and WhatsApp, voice and agent-assisted, local languages and AI. Africa’s financial systems must account for the continent’s informal economies, language diversity, infrastructure gaps and shared ambition for equity.
The sixth is SME credit-readiness services that help informal businesses build financial records, bookkeeping systems and documentation that will make them finance-ready. This may become a major industry in its own right: “Credit Readiness as a Service.” A company could assess financial records, cash flow, governance, compliance, inventory, business model and debt capacity, then provide a roadmap to become finance-ready. This is particularly relevant because the World Bank’s FINCLUDE programme is itself moving toward better loan appraisal, AI-enabled digital platforms, credit guarantees and technical assistance for MSMEs.
The seventh is merchant fraud and cybersecurity technology. As informal businesses digitise, they become exposed to payment fraud, fake transfers, account takeover, insider theft, social engineering, inventory fraud and cybercrime. A small business may have ₦10 million in annual revenue but no cybersecurity department. There is a huge market for SME-grade cybersecurity and fraud protection.
The eighth is GovTech distribution and verification platforms that help governments and development organisations identify beneficiaries, distribute interventions and measure impact transparently. Every public intervention should have a digital audit trail from allocation to beneficiary to outcome. This is not merely about efficiency; it is about accountability and trust.
The ninth, which I would add, is export African financial technology. Moniepoint’s expansion into Kenya through the acquisition of Sumac Microfinance Bank is a reminder that many problems Nigerian fintech companies are solving also exist elsewhere across Africa. The African Continental Free Trade Area creates an enormous opportunity for cross-border commerce, and informal cross-border trade already accounts for 30 to 40 per cent of regional trade in Africa. The companies that build the infrastructure for African commerce—currency conversion, payments, trade documentation, logistics, customs information, buyer verification, insurance, dispute resolution—could become extraordinarily important.
The Deeper Thesis: Productive Formalisation
There is a danger in the way we talk about the informal economy. Too often, we treat it as a problem to be solved, a deviation from the norm, a shadow to be illuminated and eradicated. This is a mistake.
The informal economy performs important functions: employment creation, low-cost distribution, livelihood generation, price discovery, community finance, last-mile logistics, market access and resilience during economic shocks. The goal should not simply be to formalise everyone. The goal should be to increase productivity, protection, access and opportunity while creating pathways to voluntary and beneficial formalisation.
This is what I would call “productive formalisation.” It means using technology to give informal businesses the benefits of formal economic infrastructure without initially forcing them through burdensome bureaucracy. A trader who begins using a digital platform could gradually receive a digital identity, digital records, business intelligence, a credit profile, insurance, supplier finance, formal registration, tax integration, larger credit and eventually expansion into regional markets. The entrepreneur moves from invisible to visible, from visible to bankable, from bankable to insurable, from insurable to investable, from investable to scalable.
If formalisation means more taxes, more paperwork, more inspections and more fees without better access to credit, insurance, markets, infrastructure and social protection, then businesses have little incentive to formalise. Formalisation must become a value proposition.
The Role of AI and Digital Public Infrastructure
Two technological developments deserve particular attention. The first is the emergence of AI-powered tools for the informal economy. In October 2025, Moniepoint launched ‘M’, Nigeria’s first artificial intelligence-powered chatbot designed to simplify insights into the country’s informal economy. Built on large language model technology, ‘M’ serves as an interactive guide that helps users navigate and understand trends within Nigeria’s informal economy, providing conversational and easy-to-understand responses to complex queries.
This is the beginning of something much larger. Imagine an AI financial assistant that a trader can interact with through voice in Hausa, Yoruba, Igbo or Pidgin. The user does not need to understand accounting, APIs, dashboards, databases or analytics. They simply ask: “How much profit did I make this week?” or “Which customer owes me money?” or “How much stock do I have?” or “Can I afford to buy another 20 bags?” The AI converts natural language into structured business data and provides actionable intelligence. The system does the complexity in the background. The user experiences simplicity.
The second is digital public infrastructure. Africa is undergoing a digital transformation, marked by rising mobile phone adoption even in remote regions, rapid fintech innovation, and the steady growth of digital public infrastructure such as interoperable payment systems and digital ID frameworks. These are not merely technical achievements. They are the foundation upon which inclusive economic growth can be built. Governments should invest in digital identity systems, interoperable payment rails, open data platforms and regulatory sandboxes that enable innovation while protecting consumers.
A Call to Policymakers
For policymakers across Nigeria and Africa, the implications are clear.
First, recognise that the informal economy is not a problem to be solved but an opportunity to be unlocked. It is the backbone of your economy, the source of most employment and a major contributor to GDP. Policies should aim to increase productivity, not merely increase registration.
Second, invest in digital public infrastructure. Digital identity, interoperable payments, open data and regulatory frameworks that enable innovation are not luxuries. They are necessities for inclusive economic growth.
Third, support alternative credit scoring and data-driven lending. The traditional banking model cannot serve the informal economy. Transaction data, cash-flow analysis and AI-enabled underwriting are the future of MSME finance. The World Bank’s FINCLUDE programme is already moving in this direction. National policies should follow.
Fourth, create pathways to productive formalisation. Make formalisation a value proposition, not a burden. Offer better access to credit, insurance, markets and social protection in exchange for registration and compliance. Use technology to reduce the cost and complexity of formalisation.
Fifth, invest in business development services. Capital alone is not enough. Businesses need systems, structures, skills and intelligence. Governments should support the development of business operating systems, credit-readiness services and management training for MSMEs.
Sixth, embrace offline-first and multilingual technology. Not every African has a smartphone and reliable broadband. USSD, voice, WhatsApp, local languages and agent networks must be part of the technology strategy.
Seventh, support cross-border commerce. The African Continental Free Trade Area is a historic opportunity. Informal cross-border trade already accounts for a significant portion of regional trade. Technology can help formalise, facilitate and grow this trade.
Eighth, measure what matters. We cannot manage what we do not measure. Governments should invest in better data on the informal economy: where businesses are, what sectors they are in, what they sell, how much they generate, how many employees they have, what financing they need, what skills they lack and what infrastructure constraints they face. The company that builds the trusted data layer could become extraordinarily important.
The Architecture of Economic Agency
Let me return to where we began. Moniepoint’s Impact Report is not merely a story about what Moniepoint achieved. It is a dataset showing us what millions of Nigerian and African businesses still need. The $700 million in loans is impressive, but the $32.2 billion financing gap is the real story. The 75 per cent of first-time borrowers is remarkable, but the millions of businesses that still cannot access formal credit is the real story. The 36 per cent increase in transaction value is encouraging, but the productivity gap that prevents businesses from scaling is the real story.
The biggest mistake would be to look at Moniepoint and conclude that we need another Moniepoint. The bigger insight is that Moniepoint’s success may be demonstrating that Africa is entering a new phase of economic digitisation. The first wave digitised payments. The next wave will digitise business operations. The wave after that will digitise business intelligence and creditworthiness. Then comes embedded finance, insurance, procurement, supply chains and cross-border commerce. Eventually, these layers could converge into a new economic infrastructure for millions of African businesses.
The opportunity, therefore, is not merely to finance the informal economy. It is to make the informal economy more productive, more visible, more trusted, more resilient and more scalable. That is where the really large opportunity lies.
Nigeria Wealth Shift 2.0 could potentially become more than a conversation about wealth creation. It could become a national and continental framework for productive formalisation, using AI, fintech, digital identity, business intelligence and inclusive infrastructure to move millions of African enterprises from economic invisibility to economic agency.
The central question should therefore become: How do we build the infrastructure that enables Africa’s millions of informal businesses to become data-visible, credit-ready, productivity-enabled and globally competitive, without forcing them to abandon the flexibility and resilience that made them successful in the first place?
That, in my assessment, is the real opportunity. It is not about building another unicorn. It is about building the infrastructure upon which thousands of future African unicorns, and millions of sustainable small businesses, can be built.
Prof. Sarumi, a digital transformation architect, political and policy analyst and leadership strategist with over 40 years of cross-sector experience across Nigeria and the African continent, write from Lagos.
References
BusinessDay. (2025, October 30). Nigeria’s informal economy: The fragile foundation of a $1 trillion ambition. BusinessDay Nigeria.
Leadership. (2026, July 23). Fintech disburses $700m loans to MSMEs. Leadership Nigeria.
Moniepoint. (2026, July 22). Moniepoint publishes inaugural impact report, revealing how first-time access to credit is transforming African businesses. Morningstar.
Moniepoint. (2026, July 22). Moniepoint publishes inaugural impact report. Wedbush.
Punch. (2025, October 31). Moniepoint unveils AI chatbot to support informal businesses. The Punch.
The Guardian. (2026, July 24). Moniepoint disburses $700m loans to MSMEs in 2025. The Guardian Nigeria.
World Bank. (2025, December 22). World Bank approves $500 million to expand finance for small businesses in Nigeria. World Bank.
World Economics. (2026). Informal economy rankings 2026. World Economics.