The long stretch of land along the Ibeju-Lekki corridor in Lagos State is punctuated at every turn by multiple Point of Sale (PoS) kiosks sandwiched between food markets and low-rent residential quarters.
The area houses the Lekki Free Trade Zones and the Dangote Refinery, expected to be the world’s largest single-train facility when completed.
Yet, no commercial bank has ever stepped foot in Ibeju Lekki, which was designed to become a central hub for business, manufacturing, warehousing and logistics, despite the two gigantic developments now rousing locals from sleep as early as 5am with rumbling trucks carrying stones, gravel or sand to and from the construction sites.
It is quite easy to deduce why Ibeju-Lekki has been overlooked by the banks. The Lekki Free Trade Zones remain largely empty when they should be brimming with businesses jostling to take advantage of the benefits of setting up shop in a free trade area. The area is also home to mostly unemployed and low-skilled workers with paltry pays. These factors have contributed to why the area has not caught the attention of any bank.
The banks are trying to be more efficient by increasingly investing in digital technology and cutting back on cash guzzling brick and mortar branches. Both factors have played a role in dowsing appetite for areas like Eleko. Avoiding such low transaction areas in order to keep operation cost low, especially amid a rampaging pandemic that has hurt companies, is one way the banks can stay in business and deliver expected returns to shareholders.
But the people have needs for financial services and that is where the PoS shops step in, filling the yawning gaps that have been left by the banks. These gaps are everywhere in Nigeria, even Africa. Mobile money agents who run the PoS shops are more popular on the continent than banks, in recent time.
For every group of 100,000 adults in Africa, there are six banks, 13 ATMs and 340 mobile money agents, according to a 2020 GSMA study on the state of the mobile money industry.
What that means is that a mobile money agent in Africa has 26 times more reach than an ATM, and 58 times the reach of a bank branch, GSMA estimates.
PoS shop or nothing
In Eleko, one of the communities in Ibeju-Lekki, it is a mobile money agent in a PoS shop or nothing at all.
“This is a village,” Similoluwa Adepoju, a resident, said. Pointing at the only tarred major road in the free trade zone, she added, “There are no banks willing to come this way because where is the money for them to make?” Adepoju, a middle-aged woman, said.
Even the local electricity distribution company also agrees that there is little business worth its presence in the area. The last time residents around the Eleko community saw light from the Eko Distribution Company (EKEDC) was over a month ago. Even then, the light does not stay more than three hours and it is off to return in four or even more weeks.
The area is largely run by generators and solar power to a lesser extent.
An Access Bank building constructed with shipping containers at Awoyaya, a distance of about 20.3 kilometres from the Zone, is the only bank that is close enough to the Eleko community, which also hosts Eleko Beach and the premium residential development, Amen Estate, where popular Nollywood actress, Funke Akindele lives. A four-bedroom house at the estate goes for N48 million.
The PoS shops have solved a huge headache for the residents who are distant from bank branches. Data show they are solving the headaches of many more people. Mobile money operators processed over 655 million PoS transactions valued at N4.7 trillion, according to the Nigerian Inter-Bank Settlement System (NIBSS) data. That is a 50 percent increase from 2019, as the pandemic proved a boon for the PoS shops.
Before PoS was Esusu
Shunned by banks, Eleko residents have learnt to survive. Prior to PoS shops that now proliferate every nook and cranny of the community, was the Esusu operators.
The Esusu operators, also members of the community, allowed residents to save money with them which they tabulated on paper. The savers will agree with the operators the right time to take back the money they have saved. The Esusu system also meant the residents could get small loans to buy new goods to replenish their shops at the local market located at the entrance to the community or the first junction inside Eleko or the one close to the refinery.
The Esusu did not prove an efficient system as residents lost money to fraudulent operators who took the savings and disappeared into thin air, or operators are not able to pay back the money saved completely on the day agreed for the saver to get the money back. Operators also lost money to borrowers who were unable to pay back the loans they collected for some reasons.
“The customers were not paying back the loans and at some point, it was causing fights,” Atinuke Ogundayo, who still operates Esusu but now combines it with PoS business, said. She does not offer loans anymore.
Importantly, the Esusu system was unable to help residents send or receive money from loved ones outside the community.
Enter the PoS vendors
Although Esusu operators have not disappeared, PoS providers are now the chief financial services providers in the Lekki Free Trade area.
They come in different shapes and colourful graffitis, from umbrellas and table stands to kiosks of different sizes. At a particular road intersection known as Inside Eleko, because it is far removed from the entrance to the community which is at the Ibeju-Lekki expressway, the number of vendors easily outstrips the number of food item sellers.
“It is a very profitable business,” said Yusuf Hameed, an apprentice who runs PoS services on behalf of his employer in an Airtel Kiosk.
PoS operation in the community is basically to take deposits and make withdrawals. The vendors charge N100 for withdrawals of N1000 to N6000 while people who want to collect between N7000 to N10000 pay a fee of N200. The average person collects between N2000 and N5000.
On an average, Hameed says he sees up to 20 customers daily at the kiosk. However, the money the operators collect does not go directly to the bank because of the distance.
It takes a whole day to conduct a bank transaction by which the operator would need to leave the community very early in the morning to embark on a three hours journey down to Ajah, Eti Osa Local Government. The earlier you get to the bank the less the queue you will need to be to get into the banking hall.
To avoid frequent visits to the banks and wasting business hours, the operators keep the monies they collect in a safe either at home or any location that guarantees protection. Usually, it is the saved money the operators give to customers coming to withdraw money.
