Since it was established in 2018, Cashbox, a Nigerian-based digital savings firm, said it has helped its over 10,000 Nigerian users save as much as N70 million and it is looking to deepen market share with new product features.
Digital or online savings is quickly transforming the spending habits of many Nigerians in a way that traditional bank savings could never have imagined. The benefits of having an online savings account include convenience and efficiency; users are able to quickly and without stress open an online savings account and manage it on the go.
What platforms like Cashbox succeed in doing is helping users cultivate a savings culture. The usual savings account allows users to make withdrawals at any time they so desire at the risk of earning insignificant or no interest. However, on Cashbox savings are planned with specific targets and incentives attached to it.
A savings plan on Cashbox can earn a user as much as 10 to 15 interest per annum depending on the set tenor. This is many times more than what traditional savings account will generate. Cashbox users are only allowed to make withdrawal on the first of every month.
“Cashbox was created because we wanted to bring basic financial services to everyone regardless of their location and also make it free of charge; no maintenance fee or whatsoever,” Sydney Aigbogun, chief executive officer of the company told BusinessDay. “Cashbox was created to help everyone cultivate a savings habit, not just for people who live in Nigeria, but also Nigerians in the Diaspora, so they can engage in saving money back home.”
He further noted that the goal is to curb excessive spending and teach people to save. Part of that plan is to launch its mobile app platform before the first half of 2019.
With the number of financially excluded people rising in the country driven by poverty, it is increasingly difficult for a lot of people to set aside money for the rainy day. In addition, bank processes and charges make it less attractive. Data from the Nigerian Deposit Insurance Corporation (NDIC) has shown that only a few depositors account for about 90 per cent of total bank deposits.
Aigbogun explains that one of the challenges is that many Nigerians do not believe they have enough to live on, not to talk of saving.
“They just believe saving is not something they can do. That is why we have made Cashbox very user friendly and easy to navigate. Once they start saving, and see how much they have saved in a short while, they just cannot stop saving,” he says.
There are two saving plans on Cashbox; the first is the Regular saver. The Regular Saver allows users save any amount regularly – daily, weekly, or monthly – and users on this plan earn between 7 to 10 per cent interest annually.
The second plan is the Locked Savings which works like a normal fixed deposit account. Nonetheless, users get their interest upfront and minimum tenor for the plan is 90 days. The plan allows users lock a fixed sum of money for any time frame above 90 days, get their interest upfront and locked funds at maturity. Users of the plan can earn between 10 to 15 per cent interest per annum depending on the length of time.
“Our users are our major marketers’ they love Cashbox and are happy to tell their family and friends about it. Our users also earn Cashbox points when they refer people who save, so with our users being our marketers, we do not spend heavily on marketing,” Aigbogun said.
Registration on Cashbox is made easy. Potential users are required to provide their full names, email, and phone number to sign-up. To complete sign-up process, the intending user will need to validate their email. The next level is selecting the saving plan and adding the ATM card number.
“After successfully adding your bank card to your profile, you then fill out the form to create the saving plan you want, you get to choose how much you save, how often you want to save and for what length of time. Everything is chosen by the user. Interest earned is calculated daily and displayed on your dashboard, so users get to see how much interest they have earned every day,” he said.
