Small and medium-sized enterprises (SMEs) are widely described as the backbone of emerging economies, and nowhere is this narrative more pronounced than in Nigeria, Africa’s most populous country. According to figures from the Small and Medium Enterprises Development Agency of Nigeria, SMEs accounted for 96 per cent of businesses in 2025, contributing more than 48 per cent of national gross domestic product and providing about 84 per cent of employment. Yet despite their macroeconomic importance, most operate on fragile financial foundations, constrained by limited access to formal credit, patchy financial literacy and weak record-keeping systems.
This financing gap has drawn attention from policymakers and financial technology providers alike. Among the institutions seeking to expand access to capital is FairMoney Microfinance Bank, a technology enabled lender positioning itself as both a credit provider and financial infrastructure partner for small businesses. This development was recently highlighted by James Edeh, head of compliance, FairMoney Microfinance Bank.
According to Edeh, securing a loan through FairMoney MFB offers a streamlined path for Nigerian SMEs to transform potential into performance.
“By prioritizing digital speed and accessibility, the microfinance bank enables eligible business owners in Nigeria to secure up to ₦5,000,000 without physical collateral; however, access remains subject to credit assessment.
“This rapid disbursement creates a real opportunity for entrepreneurs to act on time-sensitive growth prospects, whether that means restocking inventory ahead of a peak season, fulfilling a sudden large-scale order, or upgrading essential equipment. To improve their eligibility for higher loan amounts, SMEs simply need to increase their engagement with the FairMoney ecosystem; banking and managing finances directly through the app after an initial application using their BVN and business details,” he stated.
Alternative credit scoring gains traction
A defining feature of the fintech lending model is the use of non-traditional data in credit decisions. Rather than relying solely on bank statements, providers increasingly analyse transaction velocity, digital payment patterns and other behavioural data.
This approach, often described as alternative credit scoring, relies on advanced analytics and machine learning to estimate repayment capacity. Supporters say it allows lenders to identify viable borrowers overlooked by traditional underwriting. Critics caution that transparency, consumer consent and data protection safeguards must remain central as such models expand.
Edeh explains that alternative credit scoring is the engine that allows FairMoney MFB to leverage broader data sets to better inform credit decisions for a wider range of SME customers.
“FairMoney MFB doesn’t just look at a bank statement; it looks at potential. By utilizing Alternative Credit Scoring powered by advanced data analytics and machine learning, FairMoney MFB assesses creditworthiness based on non-traditional data, such as app usage patterns, transaction velocity, and digital footprints – with customer consent and in accordance with Nigerian data protection requirements,” he noted.
This approach, the head of compliance, FairMoney, assures, opens the door for businesses with limited formal financial histories to access real growth opportunities that were previously out of reach. For the Nigerian SME, this presents the opportunity to scale from small-scale survival to ambitious expansion, securing the funding necessary to innovate and compete based on the real-time strength of their operations.
According to FairMoney MFB, true business growth requires a shift from simple borrowing to disciplined wealth management. The company stated that it empowers SMEs with a suite of specialised products designed to ensure their capital works as hard as they do. Through FairTarget, entrepreneurs can define specific financial milestones, such as purchasing equipment or securing a larger office, and automate their progress toward reaching them. For operational liquidity, FairSave offers a high-interest savings account where funds remain accessible while earning daily interest, while FairLock provides long-term stability by allowing businesses to secure surplus funds at premium interest rates, protecting capital from impulsive spending. Together, these features transform FairMoney MFB from a lender into a comprehensive financial partner to SMEs that fosters both immediate scalability and long-term fiscal health.
FairMoney MFB’s Point of Sale (POS) systems is also recognised to provide Nigerian SMEs with a robust infrastructure to accept online, mobile, and in-person payments seamlessly. By transitioning from a cash-only model to a multi-channel payment system, businesses can significantly reduce operational risks such as theft and accounting errors while expanding their reach to a nationwide customer base. This digital shift unlocks real-life opportunities for growth.
“A local retailer can move beyond foot traffic to sell to customers across the country via the web, while service providers can offer “Pay with Transfer” or card options that cater to the growing demographic of cashless consumers.
“Every digital transaction creates a verifiable financial trail within the FairMoney MFB app, which the bank uses to build a more accurate credit profile for the merchant. This means that simply by making it easier for customers to pay, SMEs could potentially improve their credit profile and gain access to more competitive pricing needed for long-term expansion,” Edeh stated.
FairMoney also observes that maintaining detailed financial records has transitioned from a best practice to a regulatory necessity for SMEs. The current landscape, influenced by the Nigeria Revenue Service (NRS), increasingly values verifiable digital records as a means of supporting eligibility assessments for small business tax holidays.
Edeh pointed out that maintaining such records through record keeping can facilitate compliance with requirements for exemptions, such as the 0 per cent Company Income Tax (CIT) rate for businesses with an annual turnover below ₦100 million. “Without accurate, time-stamped digital trails, including structured e-invoices and clear transaction histories, SMEs risk not only losing these vital fiscal reliefs but also facing significantly sharper penalties for late filing or non-compliance,” he warned.
Beyond tax, streamlined records are seen bridging the information gap that often hinders access to credit. FairMoney noted that by presenting a “financial compass” of real-time cash flow and profitability, business owners can prove their creditworthiness to partners, turning their compliance into a strategic tool for securing the capital needed to scale in an increasingly formalised market.
