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How Fintech is Revolutionizing Small Business Lending in Nigeria
Challenges Faced by Small Businesses in Accessing Bank Loans
Small and medium-sized enterprises (SMEs) in Nigeria continue to struggle with obtaining financing from traditional commercial banks. Heightened risk concerns, stricter regulatory frameworks, and persistently elevated interest rates have made banks more cautious in their lending practices. This cautious approach has particularly impacted smaller businesses, many of which lack the formal documentation, collateral, and credit history that banks typically require.
The Decline in Bank Lending to the Private Sector
Data from the end of 2025 reveals a contraction in credit extended to Nigeria’s private sector, dropping to approximately ₦75.8 trillion from ₦78.02 trillion at the close of 2024. This reduction underscores a broader tightening of credit availability, with banks prioritizing larger, more secure corporate clients over smaller enterprises. Consequently, SMEs often receive only a fraction of total bank credit, especially in the form of unsecured loans, which are critical for businesses lacking substantial assets.
Moniepoint‘s Innovative Approach to SME Financing
Amid these challenges, fintech companies like Moniepoint are emerging as vital financial allies for small businesses. In 2025 alone, Moniepoint disbursed over ₦1 trillion in loans to SMEs, demonstrating the growing role of digital lenders in bridging Nigeria’s SME credit gap. Unlike traditional banks, Moniepoint leverages its microfinance banking arm to extend credit to everyday traders such as grocery store owners, supermarket operators, and suppliers of construction materials.
Rather than relying solely on conventional credit scores, Moniepoint evaluates loan eligibility based on transactional data and payment behavior. This data-driven underwriting model allows the company to assess risk more dynamically and offer tailored loan amounts that better suit the needs of informal and semi-formal businesses.
Impact of Fintech Lending on Business Growth
Access to timely working capital through Moniepoint’s loans has proven transformative for many SMEs. The company reports that businesses benefiting from its credit facilities experienced an average growth rate exceeding 36% in 2025. This infusion of capital enables entrepreneurs to replenish inventory, scale operations, and maintain cash flow continuity, which is crucial in an environment where traditional bank loans are scarce or difficult to secure.
Moniepoint’s Expanding Role in Nigeria’s Financial Ecosystem
Since its inception in 2015, Moniepoint has evolved into a comprehensive financial platform serving over 6 million active businesses nationwide. Its suite of services includes digital payments, banking solutions, foreign exchange, and business management tools, positioning it as a one-stop shop for SME financial needs.
A key driver of Moniepoint’s lending capacity is its robust payments infrastructure. In 2025, the company processed transactions valued at ₦412 trillion and facilitated more than 14 billion individual transactions. Impressively, Moniepoint handles approximately 80% of all in-person payment transactions across Nigeria, underscoring its dominant presence in the country’s payment landscape.
The Future of SME Financing in Nigeria
As traditional banks continue to tighten lending standards, fintech innovators like Moniepoint are poised to play an increasingly critical role in supporting Nigeria’s SME sector. By harnessing technology and alternative data sources, these companies are not only expanding access to credit but also fostering economic growth and job creation across the country.
