Automated savings platform, Piggybank has moved closer to securing its microfinance institution (MFI) licence and kick-off its expansion project with a $1.1 million seed funding it closed on Thursday, May 31.
In a statement it sent to BusinessDay, the financial technology (fintech) firm disclosed that it secured its seed fund from high net worth individuals, led by Olumide Soyombo, founder of LeadPath Nigeria, with participation from Village Capital and Ventures Platform.
“Piggybank.ng is a leading example of how Africans are innovating to solve African problems,” Olumide Soyombo noted. “In this case, the team is applying technology and innovation to solve a problem facing millions of Nigerian.”
The company which was founded in 2016 by three Covenant University graduates has seen 20 to 35 percent month on month growth in user traction over a period of one year. This came primarily from peer-to-peer recommendations, its referral program – Piggybank Stories, and grass-roots social media campaigns.
Piggybank also suggested that the completion of accelerator programs such as Blackbox, the CcHub’s Pitch Drive, powered by Google for Entrepreneurs, and Google Launchpad Africa boosted its chances.
“Today’s announcement allows us to expand and capitalize on the many opportunities that the market presents us with,” Joshua Chibueze, co-founder and CMO of Piggybank said. “We know the market is there, and the product has been built, modified, tested and ratified by users. With this fundraise; we can invest significantly in our people, as we build a digital financial warehouse accessible to millions of Africans who savings woes we want to put firmly behind them.”
The savings firm currently has registered more than 53,000 users with millennials accounting for an estimated 60 percent who have saved in excess of $5 million. It has also seen a savings growth of 3000 percent between 2016 and 2017.
It targets low-income savers in Nigeria with a market size of $2.2 billion. Savers on its platform earn an average of 6 percent per annum on their automated savings. The fixed deposit and Safelock savers can make as much as 10.95 percent as long as they withdraw funds once per year.
“In a country such as Nigeria, almost everything has to be paid in advance,” Odunayo Eweniyi said. “The majority of Nigerians struggle to save their income, manage cash flow and build credit, which is a huge problem as around 80 percent of Nigerians need to save a minimum of 40 percent of their monthly income, in order to survive. This is the sheer scale of the challenge we are embracing; to actively promote a savings culture in Nigeria and act as the savings infrastructure to millions of people who want a safe, transparent and innovative platform to assist them in managing their finances, on their journeys to financial freedom.”
Piggybank hopes to increase its leverage in terms of partnership with banks hence it recently acquired a micro-financing license from the Central Bank of Nigeria (CBN).
The company has also concluded plans to launch a new product Smart Target modeled after the African tradition of ajo or esusu. The product will capture large corporations and families.
