What Nigerian digital lenders can learn from the informal sector
- Over 41 million MSMEs in Nigeria provide 60% of the country's jobs.
- Less than 6% of MSMEs in Nigeria have accessed financing.
- Access to credit for MSMEs is hindered by lack of data, collateral, and consequences for defaulting borrowers.
The lack of access to credit for MSMEs in Nigeria is a significant barrier to their growth and contribution to the economy. The structural issues, including the absence of consequences for defaulting borrowers, need to be addressed to stimulate economic activity. Fintechs exploring alternative lending models show promise, but scalability and conflicting motivations remain challenges that need to be overcome.
