New Visa research reveals emerging SME megatrends in Nigeria, highlighting significant opportunities for issuers

New research from Visa, the SME Megatrends report, examines the ever-changing financial landscape of small and medium-sized enterprises (SMEs) in Nigeria. The report identifies significant opportunities for growth and innovation, particularly in the digital and financial space, with clear insights that issuing banks can leverage to unlock new revenue opportunities and gain competitive advantage.

Businesses in Nigeria are undergoing a significant transformation as high internet and social media penetration encourages SMEs to build an online presence and the growing use of e-wallets spurs digitalisation. This creates a latent need for SMEs to develop online presence and e-commerce capabilities to reach new customers, with the need for robust and simplified access tools. However, SMEs remain underfunded and under-banked, requiring access to formalized credit to grow their businesses and meet day-to-day cash flow constraints.

The rapid digital acceleration in the SME sector in sub-Saharan Africa is creating many new revenue-generating opportunities for issuing banks which, by facilitating access to core financial products and services, can leverage this potential, leading to a broadened customer base, increased transaction volumes and increased revenue prospects in digital payments industry. By working with Visa, card-issuing banks can deliver tailor-made financial products to SMEs to actively promote inclusive economic growth.

Andrew Uaboi, vice president and head of Visa West Africa, noted: “At Visa, we are committed to enabling card-issuing banks to realize the enormous potential of SME financing by focusing on addressing the critical financing gaps that hinder SME growth – an approach that involves transforming challenges into tangible opportunities. We believe that the findings of the SME Megatrends report will enable banks to improve their services. Through strategic partnerships with these banks, we strive to offer the necessary resources required to develop tailored financial solutions that meet the specific needs of SMEs.

The Visa SME Megatrends report is an essential tool for issuers to better understand the needs of SMEs while identifying possible strategies to adapt their offering to this market segment. Most importantly, the report reaffirms Visa’s unwavering commitment to increasing SME access to the digital economy, creating a resilient and mutually beneficial business environment for all stakeholders.

The SME landscape in Nigeria is in focus

Key findings from the SME Megatrends in Nigeria report:

1. Greater demand for formalized financial services: SMEs in Nigeria remain largely under-resourced and under-banked. With nominal card penetration, SMEs are looking for better access to accessible, affordable formal financial services.
2. The need for easier access to credit to facilitate and optimize cash flow: A significant number of SMEs rely on personal and informal loans because they face obstacles and requirements that make it difficult to secure loans from banks and other formal lending institutions.
3. Integration with social media platforms and communication tools to increase sales: The digital advertising landscape in Nigeria is rapidly evolving, driving the growth of e-commerce and digital payments. Streamlined and user-friendly tools help SMEs establish an online presence to compete and increase sales.
4. Electronic wallets are playing an increasingly important role in the digitalization of SMEs: E-wallets create ecosystems where consumers and businesses interact and are well placed to increase the acceptance of digital and payment cards among SMEs.
5. SMEs need support to build an online presence: The rapid growth in mobile and internet penetration in Nigeria is creating a latent need for SMEs to develop their online presence and e-commerce capabilities to reach new customers, necessitating robust and simplified access tools.
6. Transition to real-time payments: As real-time payments develop, SMEs will start to expect to pay and be paid faster.
7. Investments in SME digitalization tools are increasing: Lack of digitalization remains a major challenge for SMEs, but a growing fintech ecosystem is bringing new, locally focused digitalization tools to the market.

Strengthening the ecosystem, driving growth

Visa recognizes the critical role of SMEs in driving economic growth and is committed to integrating them into the digital economy. Through its extensive network, innovative business solutions and value-added services, Visa partners with card-issuing banks to make it easier for SMEs to access digital tools and financial services, supporting the digital transformation of SMEs.

Visa has already enabled digital solutions for nearly 67 million small and medium-sized businesses around the world, leveraging its extensive expertise and partner network, exceeding our three-year goal of enabling digital solutions for 50 million small and medium-sized businesses around the world. This achievement highlights Visa’s deep expertise and the strength of its partnerships. By identifying ways for issuers to provide SMEs with essential financial products and services, Visa aims to collectively support economic growth. These efforts not only support the growth of SMEs, but also contribute to the prosperity cycle, offering significant benefits for the economy as a whole.

Read Visa’s report on Megatrends for Small and Medium Enterprises in Nigeria here, and discover how publishers can leverage Visa SME products and services in their country.

About Visa Inc.

Visa (NYSE: V) is a global leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and governments in more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payment network, enabling individuals, businesses and economies to thrive. We believe that inclusive economies uplift everyone everywhere and see access as the foundation of the future of money flow. Find out more at Visa.com.