The Lagos State Governor Babajide Sanwo-Olu has been urged by the Fintech professionals who spoke at the annual Lagos Fintech Week to inaugurate the Cashless Lagos scheme as part of his administration’s Greater Lagos initiative.
The Fintech experts said that it is high time the Lagos State government in partnership with the private sector articulated a vision for the Cashless Lagos scheme.
According to them, the state that has over 14.3 million metro population, 30 per cent active payments terminal penetration, 64 per cent banked population, high number of bank branches, automated teller machines and mobile money and bank agents “deserves a cashless scheme”.
Speaking during the annual Lagos Fintech Week 2020 on November 10, which was held virtually due to the coronavirus social distancing protocol, the experts agreed that Lagos state – the largest sub-economy in Nigeria and the fifth largest in Africa – is ripe to go cashless. “This is enough for the governor to establish the Lagos Cashless scheme”, the Fintech specialists said.
Themed, Setting Agenda for Cashless Lagos, the annual Lagos Fintech Week attracted a large number of Fintech mavens from Nigeria, Africa and Europe.
With a widespread telecommunications infrastructure coverage, strong retail and transport networks, the experts noted, Lagos state has enumerated population into the national identity scheme, growing adoption for digital finance and robust participation ecosystem, significant diversity of financial service players.
In his keynote remarks, the Lagos State Commissioner for Finance, Dr. Rabiu Olowo, declared that the cashless policy is the right way to go. He added that consumers, corporations and government are the ultimate beneficiaries of the policy.
He said for the consumers, the cashless policy will increase convenience, offer more service options and reduce the risk of cash-related crimes while providing opportunity for cheaper access to banking services, credit and financial inclusion.
“For corporations, the cashless policy will foster access to capital, reduce revenue leakage and cash handling costs. For the government, the cashless policy will increase tax collections, push a greater financial inclusion agenda, increase economic development and lower the rate of money laundering activities”, he said.
The British Deputy High Commissioner, Ben Llewellyn-Jones, in his keynote address lauded the key role being played by the Lagos State government in developing solutions that are helping to drive broader financial inclusion nationwide.
Llewellyn-Jones noted that the rate of financial access and inclusion is much higher in Lagos State than in the rest of the country. He, however, observed that more should be done.
“If there is a silver bullet for financial inclusion, but also cashless Lagos, it is mobile money. The new Payment Service Banks will serve people who the traditional banks regard as too poor to be of interest.
“Mobile money transfers are also suitable for small payments. Among our neighbours in West Africa, mobile money is gaining traction in Burkina Faso, Cote D’Ivoire, Senegal and Ghana. The proportion of people with mobile money accounts ranges from 33 to 45 per cent in Ghana. In Kenya, more than 80 per cent of the population has mobile money accounts whereas it is only just starting in Nigeria,” he explained.
Llewellyn-Jones said that based on some recent modelling for UKAid, the proper roll out of mobile money could add about 46 million people to the Nigerian financial system, boost GDP by 12 per cent and create three million jobs in Nigeria.
The founder and CEO of SystemSpecs – owner and operator of Remita, HumanManager and Paylink payment system, John Obaro – who was represented by the Executive Director, Deremi Atanda, said there must be a clearly articulated 5-year vision (2021-2025) for Cashless Lagos.
According to him, the 5-year vision must be reflective of the current reality and emerging trends. “The Cashless Lagos scheme should be owned and managed by Lagos State government in a strong partnership with the private sector. A focused, professional, non-political Cashless Lagos team should be put in place to drive the scheme,” he emphasized.
The Executive Director and Business Head for Cloud Interactive Platforms, a subsidiary of the Cloud Interactive Media Group (Nigeria and Ghana), Olajide Mafolabomi, said that building a robust and agile Fintech infrastructure in Lagos will require the right mix of players, services and initiatives.
According to Mafolabomi, telecommunication operators and Financial Service Providers (FSPs) need to work closely to reduce access cost, onboarding and accelerate the transition through joint mass education.
He urged that to promote inclusion to the unbanked, a digital strategy is a critical key success factor. “A localized identity management system that provides a bridge to the citizen and an opportunity to introduce government-to-person (G2P) services to the wider population is very imperative in Lagos state,” he submitted.
In similar vein, the Group CEO, Innovectives Group Data Collection, Emmanuel Agha explained that with the cashless transport system, transit agencies can collect more ridership data.
“The data will assist the agencies in planning transit service. It can also be used to create other tools that support transportation planning efforts,” Agha added.
The Deputy CEO, Industry Vertical Solutions, Interswitch Group, Jonah Adams noted that the potential value of Automated Fare Collection (AFC) in Lagos is over N1.9 trillion annually.
According to Adams, this AFC figure cut across the Lagos State government-operated Bus Rapid Transit [BRT] buses, BRT private, para-urban buses, tricycles, water ferries, private cars and taxis.
”Any AFC scheme in the state must be multi-modal, integrated while leveraging on the national payment system rails already in place”, he said.