How fintechs are changing Nigerians saving culture

Justina Udeze, a 35-year-old fruit juice maker at satellite town, said she makes a daily profit of N5,000 from her business.

According to her, she ends up spending the entire money on daily expenses without saving anything, and this has been her situation for over two years until she learned of a digital saving platform offered by a fintech company and registered.

“I find it difficult to save and end up withdrawing the money I have saved already. But since using a service offered by a fintech company, I am now disciplined to save,” Udeze said.

“The platform allows me to lock my savings until the agreed period. With this, I now save so much and have been able to expand my business from the savings,” she explains.

“Also, from the savings, I have bought two more freezers for my business. I also use it to save for my children’s school fees.”

Also, Chuks Elechi, a trader at Asuwani Market in Lagos, has been discouraged from saving after being defrauded five years ago by an Alajo – an individual who provides Ajo services -an old savings system.

He usually saves N1,000 daily with the Alajo, who moves from store to store, collecting money from traders and helping them save with a bank before his sudden disappearance.

After two months of endless search, the Alajo still couldn’t be found, and most traders lost faith in ever getting back their money.

In the third month, the Alajo returned and paid back all money owed. But that incident made Elechi and some other traders in the market lose confidence in the Ajo system and have stopped saving since then.

However, after learning of a digital saving product offered by a fintech company, he decided to revive his saving culture and started making a daily savings of N2,000.

His confidence was restored owing to the reliability of the fintech offering the digital saving product, the convenience, and the monthly interest received on his savings.

He was able to save some money from his business after saving with a fintech company for 12 months. Now, he has expanded his business and has other stores in Oshodi and Lapido market areas in Lagos.

“Since I started saving with a fintech company, I was able to save for money I needed to expand my business, and I am planning to buy a car so I can easily be moving around to supply products across my stores and monitor things happening at each store,” he said.

Udeze and Elechi are among the millions of small business operators who see savings products as an incentive in their fight to expand their businesses and overcome poverty, and this is driving a rise in the country’s saving product offerings and financial inclusion.

“Piggyvest is a top fintech making savings and investments more accessible and providing tools to help Nigerians better manage their finances”

The rise of fintechs providing digital banking in Nigeria has opened new markets and opportunities, promoting saving culture and personalized banking. It has also been at the forefront of driving inclusion for the underbanked.

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Nigeria is home to a number of fintech unicorns, most of which operate in the payments system. Unsurprisingly, the payments and savings segments have been the most improved on the country’s financial inclusion index.

Fintechs provide user-friendly apps to democratize payments, savings, and investing, enabling individuals to participate from the comfort of their homes with their mobile devices.

A 2022 International Monetary Fund (IMF) working paper ranks Nigeria 11th in the sub-Saharan region for private savings.

According to the IMF working paper, 42 percent of Nigerian households during the pandemic said their source of financing was their savings.

Nigeria had 3.7 billion real-time payments in 2021, ranking sixth among countries with the largest real-time payments markets, with over 200 fintech firms in Nigeria providing online access to mobile payments, digital banking, and commercial and personal finance activities. Digital banks, like traditional banks, allow their customers to save and invest.

However, when exclusivity and personal touch are considered, experts believe digital banks have the upper hand, particularly among younger generations. At the forefront of fintechs driving saving culture in the country by providing more efficient, customised, and exceptional services is Piggyvest.

Piggyvest is a frontline fintech building democratized access to savings and investments and enabling Nigerians with better money management tools.

It stands out as a prominent online savings and investment platform in Nigeria, boasting a user base of over 4.5 million customers. It has steadily established itself as the market leader app for digital savings and investing in the country.

A feat Joshua Chibueze, co-founder of Piggyvest, attributed to first-mover advantage, product simplicity, effective customer support, constant innovation, fulfilling its business promise of instant access to funds on set withdrawal dates, and transparency with interest.

Piggyvest’s innovative platform facilitates personal savings with attractive interest rates and offers alternate investment opportunities, enabling users to boost their earnings and hedge against inflation. Any savings through Piggyvest attract a competitive interest rate ranging between 8 and 15 percent; they operate an asset under-management model.

This is higher than what the traditional banks typically offer: low-interest rates between three and five percent.

The start-up has paid out about N400 billion ($519 million) in 2022, bringing the total amount of money it has paid out to customers since its inception in 2016 to over N1.1 trillion ($1.42 billion).

This milestone means households and individuals using the Piggyvest platform can conveniently pay rent, utility, school fees, and tuition. For business operators, they can afford to expand their businesses, while those with ideas can kick-start their businesses.