By Seun Oyediran

The Nigerian economic landscape is defined by the resilience of its micro, small, and medium-sized enterprises (SMEs). From the high-traffic supermarkets of Lagos to the critical distribution hubs supporting the hinterlands, millions of entrepreneurs drive our domestic commerce. Yet, a recurring theme persists in our boardroom discussions and macroeconomic reviews: the “missing middle.” While demand remains robust across various sectors, limited access to financing remains one of the several constraints affecting SME growth, effectively putting a limit on how much the country’s economy can grow.

The data provided by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) is unequivocal. SMEs constitute approximately 96% of all domestic businesses, contributing nearly 50% of the national GDP and employing over 80% of the workforce. They are not merely a segment of the economy; they are the economy. However, the International Finance Corporation (IFC) continues to highlight a staggering credit gap. This structural bottleneck means that even businesses with proven product-market fit are often unable to fulfill orders, optimize inventory, or expand their footprint, simply because traditional capital remains inaccessible.

Merchant credit represents one financing option available to support working capital and inventory management needs. Unlike the rigid structures of traditional commercial lending, merchant credit is purpose-built for the velocity of trade. By injecting capital directly at the point of need, specifically for inventory replenishment, business expansion and equipment acquisition, it may help address short-term liquidity requirements for eligible businesses. For a merchant, the inability to stock goods is not just a missed sale; it is a loss of market share and a regression in cash flow momentum. Merchant credit may help eligible businesses address short-term liquidity constraints and support inventory management.

From a risk management and credit perspective, the evolution of digital financial services has revolutionised how we view SME creditworthiness. Historically, the absence of collateral or formal credit histories led to the systemic exclusion of many viable businesses. A data-driven approach shifts the focus from static assets to dynamic performance, enabling lenders to deploy capital into businesses demonstrating sustainable operational performance.

The macroeconomic implications of optimising merchant credit are profound. Access to appropriately structured financing may contribute to broader economic activity, employment, and business expansion. In the context of Nigeria’s urgent need to diversify away from hydrocarbon dependence, the private sector, and SMEs in particular, must remain an important contributor to economic development. To build globally competitive brands and export-led enterprises, we must move beyond the rhetoric of “supporting” small businesses and transition toward integrating them into modern credit value chains.

The strategic imperative is clear. The chasm between a local business and a regional champion is rarely a lack of ambition; it is access to capital that remains a significant constraint for many businesses. If we are to foster a new generation of African industry leaders, we must prioritise the deployment of flexible, data-driven financing solutions. When responsibly structured and appropriately deployed, merchant credit can support business growth, inventory management, and operational continuity for eligible enterprises.

Seun Oyediran, Director, Merchant Lending

By Adedapo Adesanya

Nigeria’s rapid shift towards electronic payments has come with a steep cost, as banks and their customers lost a combined N134.48 billion to fraud between 2020 and 2025.

This is according to data contained in the Central Bank of Nigeria’s Nigeria Payments System Vision 2028 document.

The report showed that fraudsters attempted to steal a total of N187.79 billion during the six-year period, with actual losses amounting to N134.48 billion across the banking and payments ecosystem.

The losses were recorded through a range of electronic and traditional payment channels, including internet banking, mobile banking, Point of Sale (PoS) terminals, e-commerce platforms, Automated Teller Machines, web-based transactions, over-the-counter services and cheques, underscoring the persistent security risks accompanying Nigeria’s expanding digital finance landscape.

An analysis of the data revealed a steady rise in fraud-related losses over the period. Losses increased from N11.61 billion in 2020 to N12.77 billion in 2021 and N14.32 billion in 2022. The figure climbed further to N17.67 billion in 2023 before surging to a record N52.26 billion in 2024.

According to the apex bank, the sharp increase recorded in 2024 occurred despite reductions in fraud amounts linked to internet banking, mobile banking and Point of Sale channels.

“Fraud amounts in Internet Banking, Mobile, and POS channels declined, yet overall losses rose by 196 per cent, primarily due to a major internal case involving N30 billion. Web fraud incidents also increased by 169 per cent,” the report stated.

The CBN noted that the development highlighted the outsized impact a single large-scale fraud incident could have on industry-wide loss figures, even when security measures were yielding positive results across several electronic payment channels.

The report also tracked changing fraud patterns across the digital payments ecosystem over the years.

In 2021, web-based fraud declined by 43 per cent, but total losses still rose as point-of-sale-related fraud incidents increased by 276 per cent. In 2022, overall fraud losses grew by 12 per cent, largely driven by major incidents involving corporate accounts, while ATM fraud jumped by more than 2,000 per cent despite declines across mobile banking, Point of Sale and web channels.

By 2023, e-commerce emerged as a major vulnerability within the electronic payments space. Fraud losses rose by 23 per cent during the year, driven largely by a spike in online shopping-related fraud cases.

“Fraud losses rose by 23 per cent, largely due to a spike in e-Commerce incidents, which escalated by 1,961 per cent. Mobile, POS, and Web channels recorded moderate increases,” the CBN said.

However, the report indicated that the industry made significant progress in 2025, as stronger controls and enhanced collaboration among financial institutions helped curb electronic payment fraud.

“In 2025, electronic payment fraud declined by 51 per cent, demonstrating the success of stricter regulations, increased industry cooperation, enhanced prevention strategies, and improved monitoring,” the document stated.

The apex bank added that it had worked closely with industry stakeholders to strengthen oversight, improve fraud monitoring systems and introduce collaborative safeguards aimed at reducing vulnerabilities across Nigeria’s increasingly digital payment ecosystem.

By Adedapo Adesanya

The federal government said it has launched a N200 billion share capital mobilisation campaign for the proposed Cooperative Bank of Nigeria.

Announcing this development on Thursday in Kaduna, the Minister of State for Agriculture and Food Security and Supervising Minister of Cooperative Affairs, Mr Aliyu Abdullahi, said the bank was designed under the Renewed Hope Cooperative Reform and Revamp Programme (RH-CRRP) and approved at the 8th Regular Meeting of the National Council on Cooperative Affairs.

Mr Abdullahi revealed that the ministry is targeting 10,000 cooperative societies across the 36 states and FCT through a tiered mobilisation plan: 1,000 societies at N21 million to N50 million, 3,000 societies at N16 million to N20 million, and 6,000 at N1 million to N15 million.

He also stated that “through this collective effort, we aim to mobilise approximately N200 billion and establish a strong, sustainable, and nationally owned cooperative financial institution capable of supporting agricultural development, enterprise growth, financial inclusion, housing, transportation, value-chain development, and wealth creation for millions of Nigerians.”

According to him, “this programme is not a government project imposed from above. It is a movement-driven reform agenda that seeks to give life to aspirations that cooperative stakeholders have expressed for decades.”

He added that to ensure continuity beyond the current administration, the ministry has established an Inter-Ministerial Technical Committee for policy coordination and a National Steering Committee with MDAs, apex cooperative organisations, and development partners.

“The Federal Department of Cooperatives has also assigned dedicated desk officers to each of the seven strategic pillars of RH-CRRP,” he added.

He noted that the proposed Cooperative Bank of Nigeria will preserve cooperative control and identity while attracting strategic investment.

A 65 per cent equity will be owned by cooperative societies through the Cooperative Trust & Investment Society of Nigeria (CoopTrust), while 30 per cent will be open to institutional investors, development finance institutions, impact investors, and individual cooperators and 5 per cent is reserved for an Employee Share Ownership Scheme.

He further revealed that the ministry is rolling out the National Cooperative Digital Architecture Platform (NCDAP) to address data gaps. Key components include the National Cooperative Smart Registry (NCSR), Cooperative Verification Number (CVN), CoopID, and CoopCHECK Credit Bureau powered by CreditRegistry.