As the Central Bank of Nigeria (CBN) continues to gravitate towards maximising its quest for financial inclusion, a new report shows that only 11 per cent of businesses in the informal sector of Nigeria’s economy save in conventional banks. The report also revealed that 39.5 per cent of players in the informal sector used digital banks, 47.
5 per cent saved through contributions and cooperatives, while 2.3 per cent applied other savings mechanisms. The “Informal Economy Report 2024” was anchored by Moniepoint Inc.
, in partnership with the Federal Ministry of Industry Trade and Investment, and Small and Medium Enterprise Development Agency of Nigeria (SMEDAN). The report said businesses in the informal market contributed over half of Nigeria’s Gross Domestic Product (GDP). It disclosed that cooperatives and group contributions formed the bulk of informal businesses’ savings, as many of them felt “closer to home” with such savings mechanisms.
“A close next option is digital banks (39.5%), and least frequently, traditional banks (11%). Their choice could be due to a lower entry barrier entry, and potentially higher returns,” the report said.
It explained that about 1.3 per cent of businesses in Nigeria’s informal economy earned above N2.5 million monthly.
It stressed, “Our data at Moniepoint shows that women own 37.1 per cent of businesses in this sector. “These data show that the informal economy represents a crucial avenue for women’s economic empowerm.