CashBox, a Nigerian-based digital savings platform, has seen an impressive lockdown response from its over 100,000 users who tucked away more money than the company had anticipated.
The company saw a 40 percent growth month-on-month between March and July with over N1 billion saved so far by users on the platform. The response has apparently galvanised Cashbox as it said it plans to expand into digital financial asset management.
Prior to the pandemic savers on the CashBox platform lodged between N30 million and N50 million on a monthly basis. Since the lockdown, that number has grown to about N200 million.
“We cannot say exactly what led to the leap, but we did intensify our campaign; making them more targetted at a specific segment of users,” said Sydney Aigbogun, founder and CEO of Cashbox. “We tried to convince users they could save their transportation since they would not be going to work anymore or other spending they will usually do while physically at work.”
Founded a year ago, CashBox has been dogged in its strategy, accomplishing in its first month twice the volume of savings of its much older and well-funded competition did in their first month. Cashbox has never been funded, although it is hoping to change that in the nearest future.
Aigbogun said the decision to not seek funding and bootstrap in its first year was so investors would see CashBox was more than an idea.
“We wanted to show our results, we wanted to show that our idea is working,” he said.
The company is hoping to raise between $600,000 to $1 million.
In June 2020, CashBox revamped its mobile application adding features like the pidgin language which is popular among young people in Nigeria. It is therefore not surprising that much of the demography of its users are young and mostly come from Lagos and Abuja.
The mobile app also has a remittance feature that makes it easier for Nigerians living abroad to send money to their loved ones without the stress of the usual bank channels. Also, the usual multiple fees are eliminated. A user living in London, for instance, can send money in pounds to the app which is eventually converted and withdrawn in naira.
The mobile app also presents users with options for savings such as the clique, regular, vault, and Swift savings. Clique allows users to save with their friends. In other words, a group of friends can set a savings target and monitor each while they meet the target. It is similar to the traditional Esusu model.
Regular enables users to load money in their savings wallets automatically. Withdrawal is easily done once and also on free withdrawal days which is once in a quarter. Regular users can earn 10 percent per annum using transfer. The vault plan is a personalised fixed deposit account that earns 10-15 percent per annum depending on a chosen tenor. Vault savers can lock funds for a period of 90 days or more, and earn interest upfront immediately.
Aigbogun believes the next frontier for CashBox is in helping its growing users manage and grow their savings. Hence it is already discussing with investment experts on potential assets that would guarantee a return on investment.
“We don’t just want to invest in anything like everyone is doing,” he said. The company is already planning a new life in agriculture investment and would consider real estate as time goes on.
Digital asset management has been on the rise driven by inexpensive, highly functional digital still and video cameras (even as part of mobile devices); increased network bandwidth; decreased storage costs; low-cost, high-performance processors; high-capacity, solid-state memory; affordable cloud services; and the requisite digital media infrastructure. The trillion-dollar worth market is still very nascent in Nigeria, and it is primarily dominated by banks that mostly serve High Net-worth individuals (HNWIs).
Currently, there are less than 20 fintech companies trying to challenge banks’ dominance. CashBox says it is coming with a strategy that would also include individuals that are not in the HNWI category.
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