Transparent and inclusive digital lending has been identified as one of the most important drivers needed for Nigeria to reach and potentially exceed its $1 trillion economy target.
This was highlighted in a policy brief by the Managing Director of FairMoney Microfinance Bank, Henry Obiekea.
According to him, Nigeria’s demographic advantage is being undermined by a significant financial inclusion gap.
“Despite having one of the youngest populations in the world, 36% of Nigerian adults which accounts for about 40 million people, Nigeria remains either completely outside the formal financial system or dependent on informal structures,” he noted.
SEE ALSO: Rethinking Fintech Oversight: Nigeria’s Push for a Fintech Regulatory Commission
Breaking down the figures, Obiekea said 26% of adults lack any banking access, while another 10% rely solely on unregulated lenders, which exposes them to high risks and limits economic productivity.
He stressed that unlocking Nigeria’s full economic potential requires inclusive access to capital, especially for young entrepreneurs whose innovative ideas are often stalled due to lack of financing.
He referenced the recent call by the Minister of Finance, Wale Edun, who urged financial institutions to intentionally fund youth-led ideas, warning that failure to do so could push millions into unregulated and unproductive financial environments. Obiekea described this government stance as a clear signal that financial inclusion is central to achieving the $1 trillion GDP goal.
Obiekea further pointed out that the exclusion crisis is more severe in certain regions particularly the North and among low-income populations. Many individuals in these groups operate mainly in the informal economy, where they cannot save securely, build credit history, or access growth capital.
He added that although mobile penetration, agent banking networks and simplified onboarding have helped reduce entry barriers, true financial inclusion requires access to credit, not just account ownership.
Nigeria’s Credit Penetration Among the World’s Lowest
Despite more Nigerians owning bank accounts, credit penetration remains extremely low at 13–19% of GDP is one of the lowest anywhere in the world.
Obiekea explained that this poses a major challenge for MSMEs and households, which depend heavily on credit to scale operations, invest, and drive consumption.
He contrasted Nigeria’s credit-to-GDP ratio with global peers:
-
Kenya & Egypt: 31%–37%
-
India & Brazil: 53%–62%
-
South Africa: ~90%
“These figures show how underdeveloped Nigeria’s domestic credit market is,” he said, noting that nations with deeper lending systems experience stronger private-sector expansion and economic resilience.
Digital Revolution Presents a Unique Opportunity
Obiekea emphasised that Nigeria’s booming mobile phone usage of over 93% of adults has eliminated the need for physical bank branches, creating a massive opportunity for fintechs to deepen inclusion.
He applauded the role of Nigerian fintechs in using mobile technology and data analytics to reach underserved communities, but warned that digital access alone is not enough.
“For digital finance to truly drive national growth, it must be built on fairness and transparency,” he said. Without these values, digital lending risks becoming predatory, with hidden fees, unclear terms, and exploitative practices that destroy trust and push customers back into the informal economy.
He stressed that genuine financial inclusion must strengthen and not weaken the financial health of users in Nigeria.
FairMoney’s Role in Supporting National Growth
Obiekea said FairMoney Microfinance Bank is positioned to support Nigeria’s economic ambitions by offering transparent, accessible and efficient financial services through its mobile banking platform.
“As a licensed microfinance bank, FairMoney is intentionally dismantling barriers to entry through clear, technology-driven processes that put transparency at the centre of every user interaction,” he added.
Comments 2