Die-hard fans have known for some time that the Nigerian film industry is truly unique, but even they may be surprised to discover just how big – and lucrative – it has become.

A new festival, Nollywood Now, takes place in London from 6-12 October and is the first major event to celebrate the second largest film industry in the world. Its chief aim is to draw wider attention to the success and popularity the films enjoy across Europe, and particularly the UK.

Nollywood makes about 2,400 films per year, putting it ahead of the US, but behind India, according to a Unesco report last year. Nigerian film-makers tend to operate in a fast and furious manner; shoots rarely last longer than two weeks, cheap digital equipment is almost always used and the average budget is about $15,000 (£9,664). The finished products often bypass cinemas altogether and are instead sold directly to the "man on the street" for about $1.50 (£1). Most films shift between 25,000 and 50,000 copies globally – although a blockbuster can easily sell up to 200,000.

So, what exactly is it about the films that resonates so much with their audience? For all of their populist appeal, Nigerian films are very rooted in local concerns, according to Nollywood Now's creative director, Phoenix Fry: "Many of the films have looked at how traditional beliefs co-exist with Islam and Christianity, Nigeria's main religions," he says. "There are some superb sequences using quite simple video effects to transform aunties into demons, or show evil animal spirits being driven out from the possessed."

This view is shared by Nigerian director and producer, Ade Adepegba, whose feature film Water Has No Enemy, explores corruption in his native country: "Nigerians are the largest group of Africans living in the UK, and the majority of them live in London," he says. "Nigerian films still hold their strongest appeal to first generation immigrants who feel a deep attachment to their homeland. So, at the moment nostalgia is the main reason for the appeal of Nollywood."

Ultimately, it's the way the films are crafted, rather than their juicy content that gives them universal appeal, says Fry. "The storytelling is so good. Nigerian filmmakers really know how to entertain their audiences. They've studied the populist genres from other countries – Bollywood musicals, low-budget horror and Brazilian soap operas, for example – and reworked these to appeal to anyone with a love of drama."

The process is tried and tested, and the main reason Nollywood is currently in such rude health, but how long can it stay that way? It's hard to see how an industry that prides itself on producing so much in so little time won't start to lose its momentum in the coming years. Diversifying is probably its best hope of lasting success, but loyal and long-standing fans may see that as a betrayal of its origins.

Adepegba believes that widening its scope will serve Nollywood well in the long term: "The industry needs to start making films with deeper social and artistic values – the path to even greater success," he says.

In October, Nigeria celebrates 50 years of independence, and thanks in no small part to Nollywood, its creative industries are under the global spotlight like never before. Film-makers need to make the most of these new opportunities to showcase the country by accurately portraying its flaws as well as its triumphs. This may mean tackling less savoury subjects regarding everyday life in the country, such as crime, corruption and abject poverty. It will not please everyone, but to ensure the legacy it deserves, Nollywood audiences should demand no less.