Nigeria’s underserved informal lending market creates massive, untapped potential for lenders and investors. In 2023, 94% of Nigerian adults—84 million—couldn’t access formal loans due to stringent collateral requirements or the need to show proof of salaried employment. Consequently, these neglected groups resort to shallow and risky informal sources of capital. Approximately 32% of Nigerian adults borrowed informally in 2023, with 26 million borrowing from family and friends and another 9 million borrowing from unlicensed money lenders, savings groups, village associations, and co-operatives.
Informal borrowers can unlock additional value for lenders and investors if brought into the formal credit system. Stears Credit Market Mapping model estimates that “high-potential” informal borrowers (i.e. sharing socioeconomic, demographic, and behavioural similarities to formal borrowers) could expand Nigeria’s $2.1 billion consumer credit market by 30% ($621 million).
In recent years, venture-backed digital lenders like FairMoney, Branch, Carbon, and Kuda Bank have emerged to target traditionally neglected
