Kenya's mobile money success holds important lessons for Nigeria's fintech industry

By Maryanne Opene

Kenya has turned mobile money into an everyday business tool, connecting millions of people to payments and other financial services. Nigeria, meanwhile, has built a competitive fintech industry that is transforming how consumers and businesses move money. Yet both markets offer an important lesson: the real value of financial technology lies not simply in making payments possible, but in making them reliable, accessible and useful to more people.

For Nigeria's fintech companies, Kenya's experience presents an opportunity to examine how digital financial services can become deeply integrated into everyday economic activity, while building on the strengths of Nigeria's own market.

Kenya's mobile money journey began in 2007 when Safaricom introduced M-Pesa. The service allowed customers to send and receive money through their phones, while a network of local agents enabled them to deposit and withdraw cash. This connection between digital payments and physical cash helped people access financial services without depending entirely on traditional bank branches.

As adoption grew, M-Pesa expanded beyond person-to-person transfers into bill payments, merchant transactions and other financial services. The growing network made the platform more useful to customers and created opportunities for businesses to build additional services around it.

The results are reflected in Kenya's financial inclusion figures. The 2024 FinAccess Household Survey found that access to formal financial services and products reached 84.8 per cent of adults, up from 83.7 per cent in 2021. The share of adults excluded from all financial services fell to 9.9 per cent from 11.6 per cent over the same period.

Mobile money has been a major contributor to this progress, demonstrating how a widely accessible payment system can help connect people to the financial sector.

Nigeria has also made significant strides. Its fintech industry has expanded through digital banking, electronic transfers, payment terminals and agency banking. Competition among banks, technology companies and payment providers has created a broad range of services for consumers and businesses.

The country's large population and extensive informal economy offer considerable room for further growth. Small retailers, market traders and other businesses need affordable ways to receive payments, pay suppliers and manage their finances.

However, financial inclusion remains an opportunity for improvement. EFInA's 2023 Access to Financial Services in Nigeria survey reported that 64 per cent of adults were formally financially included, while 26 per cent remained financially excluded.

The challenge is not simply the availability of financial applications. Customers also need dependable connectivity, affordable transactions, accessible service points and confidence that their money is safe. For businesses operating on tight margins, failed transfers, unclear charges or poor customer support can make digital payments less attractive.

This is where Kenya's experience offers a useful lesson. M-Pesa's agent network connected electronic payments to physical cash, helping the service reach customers beyond conventional banking channels.

Nigeria already has an established agency banking market. Strengthening this infrastructure, improving agent liquidity and extending reliable services to underserved communities could help more Nigerians participate in the digital economy.

There is also a commercial opportunity in developing products around payment services. Kenya's experience shows how an established payment network can become a channel for other financial products. Nigerian fintech companies could build on their existing customer relationships to offer practical tools for small businesses, including transaction records, cash-flow management and appropriately designed credit services.

For a small business, these products could provide value beyond receiving payments. Better records may help owners understand sales patterns, manage working capital and demonstrate their commercial activity when seeking financing. Such services could also help financial providers develop more relevant products for businesses that have traditionally struggled to access formal credit.

However, expansion must be accompanied by responsible lending, clear pricing, data protection and effective fraud prevention. Digital finance can improve access, but poorly designed products can expose customers to excessive debt or financial losses.

Nigeria's market structure also differs from Kenya's. M-Pesa benefits from Safaricom's strong position in Kenya's telecommunications and mobile money markets. Nigeria has a more fragmented financial services environment, with multiple banks, fintech companies and payment providers competing for customers.

This creates challenges around customer experience, but it also encourages competition and innovation. Nigeria does not need to copy Kenya's market structure to deepen financial inclusion. It can build on its existing strengths by improving interoperability, ensuring reliable transactions and making digital services easier to use across different providers.

For investors, the next opportunity may lie less in launching another payment application and more in solving problems that prevent existing services from reaching their full potential. Merchant payment solutions, rural access, fraud prevention and financial products tailored to small businesses all offer room for innovation.

The broader lesson is that financial technology succeeds when it responds to how people actually live and do business. A trader needs a payment service that works consistently. A rural customer needs convenient access to funds. A small business needs tools that make managing money easier rather than more expensive.

Kenya's experience demonstrates the potential of building a financial ecosystem around everyday transactions. Nigeria, with its large market and competitive fintech industry, has the opportunity to develop solutions suited to its own economic realities.

The next phase of growth will depend on how effectively businesses turn technological innovation into practical value for consumers and enterprises. For Nigeria's fintech industry, that means building on existing progress, extending access and ensuring that digital financial services work reliably for the people and businesses that need them most.