Push for cashless Lagos scheme

Push for cashless Lagos scheme

About a decade after the Central Bank of Nigeria (CBN) introduced the cashless policy  to promote digital payments, professionals in fintech space are pushing for the domestication of the scheme in Lagos.

 

 

With over 14.3 million metro population, 30 per cent active payment terminal penetration, 64 per cent banked population, high number of bank branches, automated teller machines (ATM) and mobile money and bank agents, financial technology (FinTech) experts say Lagos “deserves a cashless scheme”.

The experts who spoke virtually at the Lagos Fintech Week, said the Cashless scheme should complement the Greater Lagos initiative.

The experts said Lagos, the largest sub-economy in Nigeria and the fifth largest in Africa – is ripe to go cashless.

The forum which had: Setting Agenda for Cashless Lagos, it attracted a number of FinTech experts from Nigeria, Africa and Europe.

With a widespread telecoms infrastructure coverage, strong retail and transport networks, the experts believe the 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, the Lagos State Commissioner for Finance, Dr. Rabiu Olowo, said 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.

Also, the British Deputy High Commissioner, Ben Llewellyn-Jones, 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 the state than the rest of the country, stressing that more still needed to be done.

He said: “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. ”

The envoy said 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 gross domestic product (GDP) by 12 per cent and create three million new jobs in the country .

The founder/CEO, SystemSpecs – owner and operator of Remita, HumanManager and Paylink payment system, John Obaro –  said there must be a clearly articulated five-year vision (2021-2025) for Cashless Lagos.

Represented by the Executive Director, DeremiAtanda, CEO said the five-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,” Obaro said.

The Executive Director and Business Head for Cloud Interactive Platforms, a subsidiary of the Cloud Interactive Media Group (Nigeria and Ghana), OlajideMafolabomi, said building a robust and agile Fintech infrastructure in the state will require the right mix of players, services and initiatives.

Mafolabomi said telecos and Financial Service Providers (FSPs) need to work closely to reduce access cost, onboarding and accelerate the transition through joint mass education.

According to him, to promote inclusion to the unbanked, a digital strategy is a critical key success factor. “A localised 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 said.

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, said 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 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.

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The Nation

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