Digital Financial Services and the Formalisation of Informal Enterprises in Nigeria: A Policy Review

Authors

• Mayowa Olawale Ogunsola, Obafemi Awolowo University, Ile‑IfeFollow
• Helen Olubunmi Aderemi, Obafemi Awolowo University, Ile‑IfeFollow

Keywords

digital financial services, informal enterprises, formalisation, financial inclusion, mobile money, Nigeria

Abstract

Nigeria's informal sector accounts for approximately 93% of employment (ILO, 2025; NBS, 2023) and, following the 2025 GDP rebasing, contributed 42.5% of GDP in 2019 (NBS, 2025). Digital Financial Services (DFS) are promoted as a formalisation pathway, yet recent evidence (2022–2026) shows that while DFS adoption enhances productivity and financial inclusion, it does not automatically trigger business registration or tax compliance. Drawing on institutional logics and gradualism, this policy review of 28 studies finds that Nigeria's current framework conflates digital inclusion with formalisation, suffers fragmented coordination among the Central Bank of Nigeria (CBN), Corporate Affairs Commission (CAC), and Nigerian Revenue Service (NRS), and neglects demand-side barriers such as digital literacy deficits, trust concerns, and weak formalisation incentives. Many informal entrepreneurs use digital finance services (DFS) strategically while remaining deliberately informal. The article advances an adaptive formalisation framework based on three principles: graduated integration (formalisation as a continuum), value-driven engagement (tangible benefits outweighing costs), and interagency coordination. Policy implications for the CBN include revising objectives beyond account penetration, promoting graduated product design, mandating human-centred digital literacy, and leading an interagency taskforce. A formalisation sandbox is proposed for piloting integrated approaches. DFS are a necessary but not sufficient condition for formalisation; institutional bridges and value propositions must be deliberately constructed.

Author Bio

Professor Helen Olubunmi Aderemi is a Professor of Business Administration at Obafemi Awolowo University, Ile-Ife, Nigeria. Her research interests include Operations Research, Entrepreneurship, technology-driven ventures, marketing management, and human resource development, with particular focus on ICT-enabled entrepreneurship and organisational effectiveness in developing economies.

Mr. Mayowa Olawale Ogunsola is a Lecturer and Researcher in Business Administration at Obafemi Awolowo University, Ile-Ife, Nigeria. He holds B.Sc. and M.Sc. degrees from the University and is currently pursuing a Ph.D. His research focuses on entrepreneurship, green ventures, human capital development, organisational performance, and eco-innovation among Nigerian SMEs.

Publication Title

Bullion

Issue

2

Volume

50

First Page

59

Last Page

72

Recommended Citation

Ogunsola, Mayowa Olawale and Aderemi, Helen Olubunmi (2026) "Digital Financial Services and the Formalisation of Informal Enterprises in Nigeria: A Policy Review," Bullion: Vol. 50: No. 2, Article 6.
DOI: https://doi.org/10.33429/0331-7919.1644
Available at: https://dc.cbn.gov.ng/bullion/vol50/iss2/6