Urban migration is accelerating Nigeria’s shift toward digital credit as small businesses seek faster financing options
As urbanisation continues to reshape Nigeria’s economic landscape, digital financial platforms are emerging as critical tools for closing the credit gap faced by small-scale entrepreneurs and self-employed workers in major cities.
Industry data shows that by 2024, more than 128 million Nigerians, representing over half of the country’s population, were living in urban centres such as Lagos, Kano and Abuja, driven largely by the search for sustainable livelihoods. This rapid migration has expanded the informal economy, particularly among young people turning skills and small trades into income-generating ventures.
According to FairMoney Microfinance Bank, many of these urban workers struggle to access funding from traditional banks due to rigid requirements and lengthy processes that do not align with the realities of small, fast-moving businesses. The firm noted that digital financial services are increasingly filling this gap by offering simplified access to banking and credit through mobile technology.
The company explained that with just a mobile phone, internet access and a Bank Verification Number, urban entrepreneurs can now access loans, savings products and payment services tailored to their daily operations and long-term growth plans. This ease of access is proving particularly important for microbusinesses that depend on quick cash turnover.
One example cited by the firm involves a fish farmer who migrated from southern Nigeria to Lagos and set up operations in a densely populated suburb of the city. The business relies on frequent purchases of fingerlings and feed, making cash flow timing critical. Limited access to immediate funds had previously slowed production cycles and growth.
Through a digital banking app, the entrepreneur was able to open an account shortly after completing BVN verification and gain access to instant credit. The availability of quick loans enabled faster restocking and helped maintain continuous production, reducing downtime that is common among small agricultural enterprises operating in urban areas.
Beyond access to credit, FairMoney said digital platforms are also helping informal businesses move toward formalisation. Opening a bank account and using a debit card allowed the fish farmer to receive payments directly from bulk buyers, reducing reliance on cash transactions. This transition has improved record-keeping and provided clearer insight into daily revenue, an ongoing challenge for many MSMEs operating informally.
The firm added that savings features within digital banking platforms are increasingly being used by entrepreneurs to accumulate capital for expansion. In this case, portions of daily sales are being set aside to fund the addition of more production capacity, supporting gradual business growth without heavy dependence on external financing.
The digital financial services are also becoming embedded in the everyday lives of urban workers, supporting activities such as money transfers, bill payments and the purchase of utilities. For many small business owners, this integration reduces friction in both personal and business transactions.
FairMoney said it remains focused on supporting Nigeria’s expanding base of freelancers, traders and young workers who require speed, flexibility and accessible financial tools to survive and grow within the pressures of an urban economy.
