MoniePoint‘s fresh report has uncovered a worrisome economic trend within Nigeria’s informal sector, as nearly eight out of ten unregistered small businesses have battled a sharp rise in operational costs over the past year.
But they have remained unyielding despite the alarming challenges, managing to weather the storm in a manner that shows their resilience in the face of the prevailing grim situation.
Limitations, Hurdles
The 2025 Informal Economy Report, launched in Abuja, blames the spike in cost on a combination of factors, which include escalating supplier prices, surging transportation fees, and the weakening of the Naira, which has inflated the cost of imported goods and services.
These pressures have squeezed margins, with only 47% of businesses reporting any increase in profit despite 65% noting higher revenues.
MoniePoint’s analysis defines informal businesses as those operating outside Nigeria’s formal regulatory framework, typically unregistered with the Corporate Affairs Commission (CAC).
These sectors find it strenuous to obtain credit and financial services, making them particularly susceptible to economic turbulence.
Inadequate Access to Capital and Gender Disparity
The report also highlights how the sector is open to inadequate access to capital, showing that one in three informal businesses reported that the highest loan they had ever received was ₦100,000 or less.
Only 6% had secured loans exceeding ₦1million, underscoring the financial constraints many grapple with.
The report also revealed a gender gap in financial access, with male-owned informal businesses found to be twice as likely to secure high-value loans compared to those owned by women.
This imbalance raises questions about equity in Nigeria’s financial ecosystem.
MoniePoint, which provides tailored financial tools for the informal sector, emphasised its commitment to fostering inclusion.
It stated, “We recognise that many of these businesses operate without formal banking relationships.
Our platform simplifies payments and collections, and even allows users to register their businesses within the app, opening doors to broader financial support.”
Lifeline, Solid Engine
Nigeria’s informal sector grapples with overwhelming hurdles in its effort to navigate towards growth, showing potential and vulnerability.
If supported and able to obtain a financial inclusion strategy, the sector could get a lifeline and become a solid engine that drives the nation’s economic development.
