In a report by Research and Markets, Nigeria’s Buy Now Pay Later (BNPL) is poised for significant growth, with growth merchandise value (GMV) predicted to increase from $1.22 billion in 2023 to an impressive $2.4 billion by 2029.
This forecast underscores the rapid adoption of BNPL services in Nigeria, driven by a growing demand for flexible payment options among consumers and the expansion of digital financial services.
The report revealed that the BNPL payment industry in Nigeria, currently has an estimated market value of $1.4 billion, which has recorded strong growth over the last four quarters, supported by increased e-commerce penetration.
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It is worth noting the BNPL model, which allows consumers to make purchases and pay for them in installments, has quickly gained traction in Nigeria. This payment option is particularly appealing, due to the country’s current economic climate, as it enables consumers to maintain their standard of living despite the financial pressures caused by inflation. By offering a way to defer payments without incurring high interest rates, BNPL services are helping Nigerians manage their finances more effectively.
As the cost of goods and services continues to climb, many Nigerians are finding it increasingly difficult to make upfront payments for essential items. This financial strain has led to a surge in demand for alternative payment options, with BNPL emerging as a particularly attractive solution. This has led to a shift in consumer behavior, with more people seeking flexible payment options that allow them to spread the cost of purchases over time.
Africa’s leading e-commerce platform Jumia is at the forefront in this regard, after it announced two new Buy Now, Pay Later (BNPL) partnerships in Nigeria with Newedge (Easybuy), an innovative finance company in Nigeria, and CredPal, a leading Nigerian fintech company.
These partnerships are expected to expand Nigerian consumers’ access to Jumia’s marketplace, conveniently allowing them to make purchases and spread their payments over a set period while removing the barrier of immediate payment. Notably, the addition of the BNPL option is an exciting and innovative way to drive e-commerce adoption and accessibility while expanding the purchasing power of our customers.
Also, several fintech companies which include Carbon, PayFlexi, and CredPal, amongst others, have recognized the potential of the BNPL market in Nigeria and are rapidly expanding their services to meet growing demand. These companies are partnering with merchants across various sectors, to offer consumers more choices and greater flexibility in how they pay for their purchases.
For merchants, the BNPL model presents an opportunity to attract and retain customers who might otherwise be unable to afford their products. By offering installment payment options, businesses can increase their sales and improve customer satisfaction. At the same time, consumers benefit from the ability to make necessary purchases without the immediate financial burden.
The BNPL market’s growth in Nigeria is also supported by the increasing adoption of digital payment solutions. As more Nigerians turn to online shopping and digital transactions, BNPL providers are well-positioned to capture a larger share of the market.