INSUBCONTINENT EXCLUSIVE:
Jake Bright
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Jake Bright is a writer and author in New York City
He is co-author of The Next Africa.
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Africa Roundup: Safaricom unveils Bonga, Africa Talking gets
$8.6M, TechCrunch visits Nigeria, Ghana
Safaricom rolls out Bonga social networking platform to augment M-Pesa
Seeking to tap
into Africa informal savings groups the Nigerian investment startupPiggybank.ngclosed $1.1M in seed funding and announced a new product —
Smart Target, which offers a more secure and higher return option forEsusuorAjogroup savings clubs common across West Africa.
The financing
was led with a $1 million commitment fromLeadPath Nigeria, withVillage CapitalandVentures Platformcontributing $50,000 each.
Founded in
2016, Piggybank.ng offers online savings plans — primarily to low and middle income Nigerians — for deposits of small amounts on a
daily, weekly, monthly, or annual basis
There are no upfront fees.
Savers earn interest rates of between 6 to 10 percent, depending on the type and duration of investment,
Piggybank.ng Somto Ifezue told TechCrunch in Lagos with co-foundersOdunayo EweniyiandJoshua Chibueze.
Users need an account with one of
PiggyBank.ng bank partners to use the products
The startup generates returns for small-scale savers (primarily) through investment in Nigerian government securities, such as bonds and
treasury bills.
PiggyBank.ng generates revenue through asset management and fromthe floatits balances generate at partner banks.
The startup
looks to grow clients across younger Nigerians and the country informal saving groups.
&The market that we are trying to serve is largely
the millennial market, though we do not exclude anyone,& said Eweniyi, the company chief operating officer
The venture also looks to meet a demand in Nigeria for accessible investment options, citing a survey they conducted indicating that as a
top priority for people with discretionary income.
&Piggybank offers savings, but our vision is not just savings, but to become a holistic
platform — a financial warehouse — where other financial providers can plug in their services for PiggyBank users,& said Eweniyi
She cited banks, investment houses, insurance, and pension funds as possible partners.
The company currently has53,000 registered users —
60 percent of whom are Nigerian Millennials — who have saved in excess of $5M since 2016, according to a release.
PiggyBank.ng will use
its $1.1M in new seed funding for &license acquisition and product development.&
The startup has taken preliminary steps to launch in other
African countries (Kenya in particular) but could not offer exact details.
Groups will be able to choose savings options and goals through
PiggyBank.ng app and receive automated disbursement of returns across their individual bank accounts, according to COOEweniyi .
As for how
the company assures savers it won&t become another Ponzi scheme, Piggybank.ng and its lead investor point to the startup pending banking
license with Nigeria Central Bank
The company is in the process of acquiring a micro-finance banking license, something LeadPath Nigeria founder Olumide Soyombo confirmed on
He also pointed to Piggybank client balances being held with registered banks, which are protected under Nigeria own FDIC type banking
insurance.
Soyombo will take a role on Piggybank.ng board and he&d like to see them open up new options for individuals to input money on
&The agent network business is a huge play we plan to go into
They&ve basically become like human ATMs,& Soyombo said
He referenced Nigerian digital payment companyPagaandSafaricom M-Pesawith large agent network stations where clients can fund digital
accounts with cash.
While digital payments products have caught on in certain parts of Africa, E-Trade type citizen investment platforms
have yet to emerge at any scale.
Soyombo doesn&t see Piggybank.ng moving from fixed income investments to equities just yet
&Maybe down the line stocks could be an interesting play, but not right now
People are currently looking for a more risk free place to e-tail,& he said.
Soyombo believes Piggybank.ng has the potential to become an
acquisition target.
&They usually only happen in our market with two main players: banks and telcos,& he said
&The banks have been slow to try new things in this savings space
Piggybank is coming in…and filling a particular need, so they are in a very acquisitive space.&
