“I opened a bank account three months ago because my daughter kept pressuring me to do so. I still haven’t used it, and I don’t see the point,” Alhaja Tawa* declares. She is queuing to register for TraderMoni, the federal government’s ₦10,000 collateral-free loan program for petty traders.
We are at the famous Oyingbo market in Lagos, Alhaja Tawa’s base as a local herb and spice seller, and the latest stop for the government’s latest social investment program.
As we wade through the crowd, Alhaja Tawa complains about banks—too many queues, she tells me in Yoruba. “I stay at Oke Aro, and the closest ATMs are very far away and always have long queues. It is just tiring. I am sure a lot of people don’t have or use bank accounts for this reason,” she says with a heavy accent.
More than 90 million Nigerians are unbanked, meaning a substantial part of the population don’t use financial institutions or formal methods to save and borrow money. Most of these people are rural-dwelling low-income earners like Alhaja Tawa. They earn little and so save little in Nigeria’s cash-based informal sector and cannot afford the transaction costs attached to banks.
But this financially excluded group is often the target of government social welfare programs, which makes reaching them a critical part of the development drive. Companies like Softcom have tried to design digital solutions to pull in the unbanked through other channels. One of these solutions is Eyowo.
Let’s talk about Eyowo
Many Nigerians remain unbanked because they don’t have convenient options for conducting their day-to-day financial transactions. But impressive mobile phone penetration in the country has opened one potential avenue for greater financial inclusion, and Eyowo taps into this network.
Eyowo is a digital gateway that helps users spend, receive, and send money using a mobile phone. Everyone that has a registered phone number has an automatic Eyowo account that can make and receive payments. Transactions can either be done on the mobile app or through the USSD code *4255#, and you can pay utility bills, make/receive payments and purchase airtime instantly.
Benjamin Dada, Eyowo product manager, explains that it was explicitly created to solve the problem of financial access. “We want people to be able to pay and receive money with their phone numbers. We have Nigerians without bank accounts, and we have those with mobile devices, so what we are doing is filling that financial gap with those mobile devices instead of bank accounts that are harder to penetrate,” he outlines.
Eyowo Adopted as a Social Impact Tool
There is a carnival-like atmosphere at Oyingbo market as the traders speak to representatives of the Government Enterprise and Empowerment Program (GEEP), the umbrella vehicle for TraderMoni. Alhaja Tawa looks relaxed, a state I can already tell is an unusual one for her at work.
She nods in agreement when I ask about how straightforward the TraderMoni scheme is. Through the Eyowo platform, the federal government sends collateral-free loans to the beneficiaries of TraderMoni using their assigned phone numbers.
“I like getting the payment on my phone,” Alhaja Tawa enthuses as she puts down her name and phone number at the registration stand. The scheme was designed for artisans and petty traders like her who cannot easily access financial services or don’t have bank accounts.
After she registers, Alhaja Tawa and I are accosted by an Eyowo representative. I am surprised to see that Alhaja Tawa has questions. “How can I retrieve my money after the transfer has been made to my phone number?” she asks. The representative explains that there are Eyowo agents, selected residents chosen to disburse cash to beneficiaries of TraderMoni.
The process he describes is simple. Beneficiaries share their Eyowo balance with a designated agent, who then confirms the balance in the user’s wallet, and hands them the cash equivalent.
One of the agents based in Kano State, Alhaji Naira, breaks it down further on a phone conversation. “When people come to me I check their Eyowo balance for how much they have in their wallet. I do this either through the app or their phone number. When I confirm the amount, I hand them the cash,” he says.
Alhaji Naira believes the process is quick and efficient, and as a mark of his endorsement, reveals to me that he even pays his staff through Eyowo.
Tara Ben-Adeola, Online Market lead for Eyowo, says that the logic behind using agents is twofold: getting cash across to locals as quickly as possible and catering to unbanked recipients who have no interest in opening bank accounts or dealing with banks.
As Alhaja Tawa and I prepare to leave the TraderMoni stand, we bump into one of her friends, Mrs. Aderibigbe, who grinds pepper and tomatoes in the market. Mrs. Aderibigbe is already TraderMoni-registered and has just had her money transferred to her bank account from her Eyowo wallet by a representative.
Considering that not everyone who uses Eyowo is unbanked, the option of involving banks in transactions are open. Transfers, for example, can be made from an Eyowo wallet to a bank account through the mobile app or USSD. Similarly, cashless withdrawals at designated ATMs are a thing.
“I did not believe before now that I could receive money on this my small phone. Imagine all the trips to the bank I’d have avoided,” Mrs. Aderibigbe purrs. Before she heard about Eyowo, she barely made did any transactions because the long bank queues and transaction costs were too much for her.
Eyowo may just be one platform, and TraderMoni may just be one scheme, but all efforts to address financial exclusion are critical in the battle against poverty. Tokunbo Olugbade, who is with Eyowo's marketing and communications department, suggests that Eyowo may expand into other innovations; for now, the focus is on making things easier for the unbanked, one transaction at a time.
*name changed to protect identity