The Battle for Last-Mile Financial Inclusion
Hajiya Ramatu Suleiman grows onions on two plots of land outside Gusau in Zamfara State. She does not own a smartphone, and her nearest commercial bank branch is forty minutes away by motorcycle. Yet, she is financially included through a microfinance bank loan officer who rides to her farm, records her savings in a paper ledger, and extends her a seasonal loan of N150,000.
Seven repaid loan cycles allowed Suleiman to expand from two plots to five, hire two farm labourers, and keep her eldest daughter in school. She does not use OPay or Moniepoint. However, the viability of the traditional institutions serving her is now in question as Nigeria's fintech revolution accelerates.
The Central Bank of Nigeria revoked the licenses of 46 microfinance banks in a single regulatory action on July 1, 2026. This followed a previous sweeping action on May 23, 2023, when the regulator revoked the licenses of 179 microfinance banks, four primary mortgage banks, and three finance companies.
Fintech Giants Reshape the Deposit Market
Nigeria's financial inclusion rate reached 74% in 2023, up from 64% in 2020, driven largely by digital platforms. Moniepoint processed N412 trillion ($298.6 billion) in payments in 2025, capturing 38% of the country's digital payment volume and powering 80% of in-person retail PoS transactions. The platform also disbursed over N1 trillion ($724 million) in small business loans and holds a national microfinance bank license.
Other digital players show similar scale. OPay counts over 45 million registered users and one million merchants, while PalmPay serves 40 million users and one million merchants. FairMoney also disbursed over N150 billion ($108.7 million) in SME loans in 2025.
This rapid growth has triggered a competitive squeeze in the deposit market. When fintechs offer higher rates on wallet balances than community microfinance banks can afford, they attract slightly more affluent informal sector clients. This deprives traditional microfinance banks of the deposits needed to cross-subsidize the high cost of serving remote, low-income borrowers.
The Persistent Rural Gender Gap
Despite the rise of digital banking, traditional microfinance banks remain essential for underserved demographics. Microfinance deposits surged 168% to N1.25 trillion by June 2024, and LAPO Microfinance Bank surpassed N1.4 trillion in cumulative credit by 2023, primarily serving women. Yet, significant gaps remain in rural areas where digital infrastructure is lacking.
According to Enhancing Financial Innovation and Access, 35% of rural Nigerian women have no bank account of any kind. Only 47% of all Nigerian women accessed formal financial services in 2023, compared to 58% of men. Reaching the Central Bank of Nigeria's Payments System Vision 2028 target of 95% financial inclusion will require the community-embedded infrastructure of traditional microfinance banks.
Speculative Licenses and Policy Solutions
The microfinance sector also battles historical structural issues. During years of multiple foreign exchange windows, some operators acquired microfinance licenses to access preferential dollar allocations rather than lend to the poor. Industry practitioners estimate that out of about 804 microfinance banks, the majority are dormant, leading to a secondary market where unused virgin licenses trade for N400 million to N700 million ($289,855 to $507,246).
To support genuine operators, analysts suggest routing government development programs through community-embedded institutions. For instance, the Anchor Borrowers Programme disbursed over N1 trillion ($724 million) to more than 4.5 million smallholder farmers but faced exclusion challenges because commercial banks lacked local intelligence. In contrast, NIRSAL Microfinance Bank operates roughly 100 branches, which remains limited compared to the dense network of independent unit microfinance banks.
A tiered licensing framework could help protect the sector. This would separate developmentally mandated community institutions from commercial-scale fintech giants, holding each to capital and performance standards appropriate to their actual operating scale.
