Ground Truth: The Invisible Merchants of Lagos
Between November 15 and November 22, 2025, Team Catalyst left the building and went into Lagos markets, motor parks, and commercial hubs. We didn’t start with assumptions about what problems needed solving. We started by listening to the people running Nigeria’s real economy.
The Discovery Phase
We executed what the CATS methodology calls a Broad Scan, a disciplined refusal to build solutions based on what we think problems are. For two full weeks, we immersed ourselves in the daily operations of micro merchants who comprise the backbone of Nigerian commerce yet remain systematically excluded from formal financial services.
Our team visited bustling markets in Yaba, Oshodi, and Computer Village. We spent mornings in motor parks watching okada riders and bus drivers conduct thousands of daily transactions in pure cash. We interviewed market traders selling everything from electronics to foodstuffs, tailors operating from small stalls, phone repair technicians serving dozens of customers daily, and provisions sellers who’ve maintained the same location for over a decade.
What We Witnessed
The scale of economic activity was staggering. Forty million micro merchants across Nigeria contribute fifty eight percent of national GDP according to World Bank data. These aren’t hobbyists or side hustlers. These are professional business operators with established customer bases, consistent revenue streams, and demonstrated market validation. They wake up at 5 AM to set up inventory. They negotiate with suppliers. They manage cash flow across seasonal fluctuations. They build reputations through years of reliable service.
Yet every single merchant we spoke with shared variations of the same frustration. When they approached banks for loans to expand inventory, upgrade equipment, or scale operations, they were rejected outright or offered predatory terms. The banks couldn’t see their creditworthiness because traditional lending frameworks demand physical collateral, audited financial statements, and formal credit histories. None of which informal economy participants possess despite running viable, profitable businesses.
Voices from the Markets
One trader in Yaba market told us directly: “I’ve been selling here for five years. I make money. But when I went to the bank for a loan, they said I don’t exist.” She handles twenty to thirty thousand naira in daily transactions. She maintains relationships with dozens of regular customers. She’s never missed a rent payment to the market association. Yet according to formal financial institutions, her economic activity is invisible.
A phone technician in Computer Village shared similar experiences. He repairs fifty to seventy devices weekly, earning between one hundred and two hundred thousand naira monthly. He’s trained two apprentices who now run their own shops. He wants to expand to a larger location and stock more inventory, but no bank will lend to him because he can’t provide land certificates or vehicle titles as collateral.
Multiple merchants described turning to informal lenders who charge ten percent monthly interest, effectively one hundred twenty percent annually. They accept these predatory terms not from choice but from desperation. A market vendor needs two hundred thousand naira to stock inventory before holiday shopping seasons. Without access to formal credit, she borrows from a local lender knowing that missing a single payment could result in losing her stall or facing public shaming that destroys her reputation in the community.
The Pattern Emerges
After two weeks and dozens of conversations, the pattern crystallized. The problem wasn’t lack of creditworthiness. The merchants we interviewed demonstrated business competence, market validation, and financial discipline. The problem was invisibility. Their economic activity happened entirely in cash, leaving no digital trail that financial institutions could assess. They operated without formal business registration, not from negligence but because the bureaucratic barriers made registration impractical for small scale operations. They lacked physical assets to use as collateral, not from financial mismanagement but from youth or from operating in sectors where profit margins can’t support property ownership.
Traditional banking infrastructure was designed for large corporations with accounting departments, property holdings, and established relationships with financial institutions. This framework systematically excludes the real economy where most Nigerians work. The thirty two point two billion naira financing gap documented by the World Bank isn’t an abstract number. It’s forty million merchants locked out of growth capital despite running the businesses that feed families, employ apprentices, and generate the majority of Nigeria’s economic activity.
The Question That Shaped Our Solution
Standing in Oshodi market on November 22nd, watching hundreds of transactions happen in pure cash with no digital record, we asked ourselves: what if we could make this economic activity visible? What if daily sales data, customer relationships, and operational consistency could become the foundation for creditworthiness instead of physical collateral? What if investors could assess businesses based on actual performance rather than inherited assets?
That question became the seed for Catalyst. We weren’t going to build another lending platform. We were going to build trust infrastructure that makes forty million invisible merchants visible to the capital that could transform their businesses and their communities.
Next: Formulate Insight - How we made sense of what we discovered