There is probably no worse way to start your day than spending half an hour or more haggling over your balance with a conductor or trader, or having to leave your money to meet up with work. This is a regular occurrence for people who live in busy cities like Lagos, and this would often result in someone losing money to another.

Sanwopay is a Lagos-based startup looking to solve this problem by providing financial inclusion for transporters and traders. Its products are targeted at transforming payment systems among this group that has largely been left unattended in the financial system.

Samson Olubayo, Founder of Sanwopay was a guest on the Nairametrics Business Half Hour show where he shared insights on how the business is going to change the payment systems in the informal sector, taking it one place at a time.

“Sanwo is a Yoruba term meaning “to pay” and is a normal slang among the informal sector participants. Sanwopay started in November 2020, with a single location and has now grown to three locations within a space of ten months. The target was to help transporters and market women save, send and receive money instantly without having to worry about leaving their place of business.

“We started because of the need and my experience in Lagos streets with conductors. People get into unnecessary fights with transporters and petty traders over the issue of change. I discovered that these set of people only respond to cash payment and they are not concerned about any drive for a cashless society. They can get reactive when you suggest anything other than cash payments, and that is why we sought to look for a way to break into the space and include them in the financial ecosystem,” he explained.

To break into the space, Sanwopay started with a daily savings system that mirrored what the target market are already used to, but on an informal level. The daily savings (referred to as Ajo among the yoruba’s) is like a thrift collection system where individuals save a part of their daily earnings.

Their existing system where the traders and drivers had to worry about the thrift collector and what would be their fate if he or she runs away with their funds. Sanwopay came with a more secured system where these merchants are assured of the security and accessibility of their savings. To top it, Sanwopay placed a fixed charge of N150 monthly charge on the savings irrespective of the amount saved daily – a deal way better than what they had already. With these incentives, it did not take time for them to subscribe to the individual and group savings product.

There is also the added advantage of community service centres located in major garages and markets, so that they do not have to worry about having to go through long queues in the bank or cut through red tapes before they can access their funds. This creates a soft landing even for those that may not be as tech-savvy as the others. There are also soft loans and microcredit options for the merchants to access if they need to restock, or if the drivers need to service or fix their vehicles.

Having gotten them subscribed to a savings plan and a microcredit plan, it was easier to then get them to accept receiving payment into their Sanwopay account from customers and passengers since they know that they can access the funds almost immediately.

Sanwopay is currently onboarding more merchants, transporters and traders before its product will be rolled out fully to the public. “There would be no point getting such a product out to passengers and customers, if the people who will receive payments through the system are yet to accept it. We are onboarding these merchants and creating accounts which they will use to receive payments,” Olubayo explained.

Sanwopay now has presence in Iyana-ipaja, Isolo and Ikotun axis, and plans to spread out to other commercial areas like Oshodi, and Mile 12 before the end of the year.