Nigeria’s fintech ecosystem is emerging as a central driver of financial inclusion, with digital platforms expanding access to underserved and excluded populations, according to the Central Bank of Nigeria’s (CBN) Fintech Report 2025.
The apex bank disclosed that fintechs carry out this process through simplified onboarding processes and grassroots distribution models.
The recently released report, ‘Shaping the Future of Fintech in Nigeria: Innovation, Inclusion, and Integrity,’ identifies tiered or low-KYC onboarding as the most effective strategy for widening access to financial services, cited by 75 percent of fintech respondents drawn from a nationwide fintech survey and months of stakeholder engagement.
This is closely followed by agent or mobile network partnerships, leveraged by 62.5 percent of firms to reach low-income and rural communities.
Other inclusion tools highlighted include USSD or feature phone/accessible products (37.5 percent), embedded finance through cooperatives and retail platforms (37.5 percent), partnerships with government or donor programmes (25 percent), among others.
The CBN noted that fintech offers a powerful mechanism for extending access to underserved and excluded populations, particularly as mobile phone penetration far outpaces access to traditional financial services, creating an opportunity to close the financial access gap through digital channels.
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Despite progress, the report underscores persistent structural barriers slowing deeper inclusion. The most cited challenge limiting fintechs’ ability to reach excluded populations is the lack of digital identity or credit history, mentioned by 37.5 percent of respondents.
Workshop participants clarified that the problem is not the absence of identity systems but challenges around the cost, accessibility, and usability of identity verification infrastructure, reinforcing the need for more affordable and developer-friendly integration.
Nigeria’s existing identity frameworks, including the Bank Verification Number (BVN) and National Identity Number (NIN), were described as foundational to digital onboarding and trust-building.
The report noted that improving interoperability, reliability, and system integration could transform these platforms into robust, universal identity utilities capable of unlocking broader financial inclusion and digital innovation.
To address cost barriers, the CBN is collaborating with the National Identity Management Commission (NIMC) to deliver affordable National Identification Number (NIN) APIs, a move expected to reduce costs and widen access.
Since 2023, NIMC has also worked with the Nigeria Inter-Bank Settlement System (NIBSS) to integrate identity into payments through the AfriGO domestic card scheme, deployed as both a general multipurpose card and a government-to-person (G2P) social payments card. This initiative is now integral to the Federal Government’s financial and economic inclusion strategy.
Policy constraints on inclusive lending
The report reveals ongoing policy debates around the lending restrictions placed on Payment Service Banks (PSBs), which stakeholders view as a constraint on deeper economic inclusion.
“A key policy debate centred on the lending restrictions for Payment Service Banks (PSBs), widely viewed as a constraint on deeper economic inclusion,” the report stated, with participants urging the CBN to review the framework.
Some industry players proposed a dedicated digital bank licence as a more effective pathway for inclusive lending rather than expanding the PSB mandate, citing supervisory complexities given PSBs’ majority ownership by telecommunications companies.
Beyond institutional barriers, stakeholders highlighted operational challenges such as the cost of last-mile delivery, agent network limitations, and limited mobile or data penetration, all of which continue to shape the economics of serving low-income markets.
The report identified trust as a core determinant of whether underserved populations adopt digital financial services.
Across discussions, there was recognition that trust remains a central barrier to inclusion, with stakeholders calling for clearer communication on consumer protections and consistent enforcement to strengthen public confidence.
Affordability also emerged as a structural tension. Roundtable participants warned that ultra-low transaction fees, while beneficial to consumers, reduce the commercial viability of serving rural or low-income markets.
To achieve sustainable inclusion, the report suggested a periodic review of pricing frameworks and interchange rules to balance affordability with incentives for fintechs and banks to extend infrastructure into remote regions.
