Bridging Nigeria’s Financial Gap: How BaaS is Expanding Beyond Lagos

For years, Nigeria’s fintech sector has championed financial inclusion as a key objective. Yet, despite an influx of digital banking startups, much of the country’s financially excluded population—particularly in Northern Nigeria—remains underserved. While major fintech players have focused on Lagos and other urban centers, newer entrants like Fintava Pay are testing a Banking-as-a-Service (BaaS) approach to extend financial services beyond Nigeria’s commercial hubs.

Why Financial Exclusion Persists in Northern Nigeria

Despite the Central Bank of Nigeria’s push for cashless transactions, millions of Nigerians remain unbanked. The North East and North West have some of the country’s highest exclusion rates—38% and 47%, respectively—due to a mix of low digital literacy, lack of banking infrastructure, and cultural reservations about interest-based banking.

Most fintech startups that set out to “bank the unbanked” have centered their operations in cities, where smartphone penetration, internet access, and fintech adoption are higher. However, in many rural parts of Northern Nigeria, financial services depend on informal networks, with cash still dominating transactions.

The BaaS Model: A Sustainable Solution or a Niche Strategy?

Fintava Pay, launched in 2022, has taken an alternative approach—instead of building a consumer-facing app, it provides white-label banking infrastructure for businesses, agent networks, and microfinance institutions. The company’s platform allows these entities to customize banking services for their specific communities.

This model differs from those of fintech heavyweights like Moniepoint and Opay, which operate direct-to-consumer agent banking networks. Instead of competing for users, Fintava Pay is betting that businesses and super agents will drive adoption in regions where traditional banks have struggled.

However, challenges from adoption barriers to regulatory risks and how profitable this would turn out to be are factors to consider.

Looking Ahead: Can BaaS Scale in Nigeria’s Financially Excluded Markets?

Fintava Pay recently partnered with BusyPay, a Kano-based super agent network, to expand its banking services. According to the company, 1,000 customers signed up within 24 hours of launching BusyPay’s custom banking app. The company also claims to have processed over ₦30 billion ($38 million) in transactions.

However, scaling beyond early adopters will be the real test. While BaaS presents a low-cost alternative to traditional banking, its success depends on whether local businesses and consumers see long-term value in white-label fintech services.

As Nigeria’s fintech landscape evolves, BaaS could become a viable path to financial inclusion—but whether it can achieve widespread adoption or remain a niche strategy for underserved regions remains an open question.