Illustrative

Digital TransformationAFC-DIG-LAGOS-01

Lagos SME Digital Payments Rail

Nigeria · LagosDigital financial infrastructure · SME payments and settlement rail

A cloud-hosted payment switch that moves Lagos SMEs off cash for supplier payments through agent-bank partners, targeting 250,000 merchants and 40m transactions a year by year 3, with USD 2.8m equity sought toward a c. USD 3.6m project.

Project cost

c. USD 3.6m

Sponsor estimate, 2025¹

Capacity

250,000 registered SME merchants (year 3 target)

40,000,000 transactions/year (year 3 target)/yr modelled

Capital sought

USD 2.8m

Equity sought

Instrument

Equity

Equity; USD 0.4m already committed.¹

Timeline

To launch

After licence and the raise

Rationale

68% of 1,400 surveyed Lagos SMEs rely on cash for supplier payments and would switch to a trusted digital rail with same-day settlement.² Lagos State has about 1.2 million registered SMEs; an independent study models 210,000–260,000 reachable within three years.²

Platform: Cloud-hosted payment switch
Channel: Two agent banks, signed term sheets
Target: 250,000 SMEs, 40m transactions a year by year 3
Licence: CBN PSP licence applied for

Investment opportunity

Transaction structure

USD 2.8m of equity toward a c. USD 3.6m greenfield project, with USD 0.4m already committed.¹

Use of funds

Platform build-out, agent-bank integrations, licensing, rollout across Lagos State and early operating costs.

Revenue basis

Transaction fees averaging about USD 0.9, shared with two agent-bank partners at agreed rates above a fee floor.³

The ask

Equity investors for the USD 2.8m round to build and launch the SME payment rail across Lagos State.

Why it is bankable

Demand surveyed.

68% of 1,400 surveyed Lagos SMEs rely on cash for supplier payments and would switch to a trusted digital rail with same-day settlement.²

Distribution signed.

Both agent-bank MOUs are now signed commercial term sheets, with agreed revenue-sharing rates and a transaction-fee floor.

Market corroborated.

The independent study models 210,000–260,000 reachable SMEs within three years, in line with the 250,000 target.²

Model reviewed.

An independent adviser reviewed the financial model against the signed terms: assumptions reasonable, with ramp-up sensitivities.²

Data and evidence · Independent demand study, Lagos

1,400 SMEs

Surveyed in five Lagos LGAs²

68 %

Pay suppliers in cash, would switch²

1.2m SMEs

Registered in Lagos State

210–260k SMEs

Reachable within three years²

2 banks

Signed agent-bank term sheets

Project readiness and timeline

OriginationGreenfield
FeasibilityDemand study done
StructuringTo follow
Financial closePost-diligence
ConstructionTo follow

Key risks and mitigants

Licensing

The CBN Payment Service Provider licence is applied for and further information has been requested; launch depends on its grant.

Merchant adoption

Ramp-up may be slower than planned; the adviser's model review includes ramp-up sensitivities.²

Partner concentration

Distribution runs through two agent banks; signed term sheets fix revenue-sharing rates and a fee floor over a 3-year tenor.

Transaction terms

Offtaker: SME merchants via the agent-bank partner network
Contract status: Signed term sheets with 2 agent banks; 3-year tenor
Tariff / pricing: About USD 0.9 per transaction (average fee)³
Instrument sought: Equity
Licence: CBN Payment Service Provider licence applied for; further information requested
E&S category: Category B³
Location: Lagos State, Nigeria
WAIIS pillar: Digital Transformation

Development impact

Formalisation

Moves SME supplier payments from informal cash handling onto a traceable digital rail.

Inclusion

Brings small merchants into regulated digital payments through agent-bank distribution.