Moniepoint co-founder and Group CEO Tosin Eniolorunda said African businesses had left a significant growth opportunity untapped by continuing to design products and services around formal economy customers while overlooking the informal sector that drives the majority of economic activity across the continent.
Eniolorunda made the comments in public remarks reported by Nairametrics Finance, arguing that a concentration on formal businesses and salaried consumers has created a gap that fintechs, banks and other financial services providers could fill by tailoring offerings to informal-market realities. He identified the informal sector as a key area for expansion for firms seeking volume, reach and growth in African markets.
WHY INFORMAL SECTOR MATTERS
The informal economy in many African countries accounted for the bulk of commerce and livelihoods, according to the account of Eniolorunda's remarks. That reality meant large segments of entrepreneurs, traders and households operated outside conventional employer payrolls or formal business registries, creating demand for different financial products and distribution models than those designed for corporate clients or salaried workers.
For banks and established financial institutions, the informal sector posed a range of operational and compliance challenges, from verifying customer identity under standard know-your-customer frameworks to assessing creditworthiness where formal financial histories do not exist. Those frictions had contributed to a preference among many institutions to focus product development on formal businesses and consumer segments that fit established risk and compliance systems.
Eniolorunda framed that focus as a strategic oversight, rather than an inevitability, arguing that firms that adapt product design, underwriting and distribution to informal-market conditions could capture durable customer relationships and revenue streams. He also positioned the informal economy as an area where digital payments, simplified onboarding and product innovation could unlock growth at scale.
IMPLICATIONS FOR BANKS, FINTECHS AND POLICY
The comments from Moniepoint's CEO underscored a tension facing African financial markets: incumbent banks often have risk controls and product architectures that align with formal-sector clients, while fintechs and payments firms have targeted mass-market segments but still encounter barriers in serving informal actors effectively and profitably.
For fintechs, Eniolorunda's view suggested an opportunity to tailor platforms that addressed day-to-day cash flow management, payments acceptance and basic financial services in ways that matched informal traders' operating patterns. For banks, the observation implied a need to reassess customer segmentation, distribution costs and risk-assessment tools if they sought to broaden their client base beyond formal customers.
Regulators and policymakers also faced a role in shaping the environment for formal-informal financial integration, as regulatory frameworks around digital identity, customer verification and agent banking influenced how easily providers could onboard informal customers while meeting compliance obligations. Market actors cited the need for practical regulatory approaches that balanced financial inclusion with anti-money-laundering and consumer protection requirements.
Moniepoint operates in an ecosystem where payments and fintech firms frequently act as a bridge between formal financial services and informal economic activity. The CEO's comments reinforced a broader industry narrative that digital finance and targeted product design could reduce frictions for informal businesses and incorporate them into the formal financial system through usage rather than immediate formalisation.
How incumbents and challengers acted on that assessment was likely to shape competition and collaboration across African financial services markets, including distribution strategies, investment in agent networks, product bundling and partnerships with regulators and development agencies focused on inclusion. Eniolorunda's message invited firms to consider whether their product roadmaps and go-to-market strategies aligned with the continent's dominant economic realities.
Sources: Nairametrics Finance