Business

Unfold: Piggy Bank

Most Nigerians are familiar with a square wooden box with a narrow hole at the top, named kolo, that is used for squeezing in naira notes. Kolo is a Nigerian representation of the widely known fancy rubber pig with a thin hole called Piggybank.

A Fintech company named PiggyBank is spearheading the digital savings culture in Nigeria. Piggybank is an online savings platform that helps manage spending habits by automating the process of saving regularly (daily, weekly or monthly). The platform allows users to withdraw for free on set withdrawal dates while withdrawing outside the set withdrawal dates will attract a 5-percent penalty. Thus encouraging you to leave your savings untouched till your savings target is reached.

It’s not what you make it’s what you keep. 

The idea of saving, when you don’t earn much and can barely pay your bills might seem laughable. So why put in an effort to save? There is never going to be enough money to save. But you have to start somewhere and if you continue to work at it, your financial situation is likely to improve over time.  One important thing anyone can do for their financial wellbeing is getting in the habit of saving. Saving money is a worthy endeavour. It offers you options and gives you some peace of mind. Forming the habit and consequently, a culture of saving helps in curbing the scarcity mentality. A lot of people do not save because they think they don’t have enough to get by with, talk more about saving. This puts them in a frame of mind of “there is not enough”.

If the thought of lack has become a part of who you think you are, you will experience lack and all you will see is lack. –  Eckhart Tolle

If you have struggles saving, it’s better to start with a small amount you consistently save over a period of time (weekly and monthly are more suitable) rather than a larger amount that might be harder to keep up with. The development of a savings culture is so important in our African society today if the poverty levels are to be reduced. Saving is a pathway to wealth creation.

Founded in 2016 by Somto Ifezue, Odunayo Eweniyi and Joshua Chibueze, graduates of Covenant University, Nigeria, Piggybank.ng is positioned to fill a void for tens of millions of Nigerians, who have no access to credit, in a country where up to two years’ rent is often required upfront to secure a home. Targeting low-middle income savers in Nigeria, of which there are 26.5M with a market size of $2.2Bn, the fintech start-up is an automated savings platform where savers manage their finances by depositing small amounts of money [starting from as little as USD$1/day] on a daily, weekly or monthly basis, depending on their saving target, free of charge. Savers can expect to earn on average 6% per annum on automated savings or 10.95% per annum on the fixed deposit product, Safelock and can withdraw funds once per quarter. Piggybank.ng generates its revenues through asset management, which currently stands at 5 – 7%, reports Oluwatosin Adeshokan.

If you want to be able to invest in your ideas and other people’s ideas you’ve got to cultivate the discipline of putting money aside. You can’t be giving excuses not to save because you don’t know where to save. Preparation meets opportunity. Because you’ve developed a savings culture and you know you have money accumulating your mind goes to work and starts looking for information on how to put the money to good use. A savings culture allows you to put things into perspective. Is buying a new car in place of an old one, more important than being able to do the things that have value to you?. This culture has a positive effect on not just you but generations to come. It is an extremely important legacy to leave to the coming generations.

If you can keep a big gap between your saving and your spending, you can gain financial flexibility much earlier.

The 1st quarter alone (Q1) of this year, Piggybank users have saved over 70% of what was saved throughout 2017. Although Cowrywise, Kolopay, and Reach are direct competitors to Piggybank, the company still has the larger market share in the digital savings space and a better public sentiment than its competitors. Piggybank is not your typical bank in the sense that it doesn’t occupy a physical space that you can go in at any time to make a transaction.  It’s simply a service that helps people save – a digital savings box.

All the funds saved by users are kept and monitored by Piggybank’s partner, United Bank for Africa, UBA. The company has no access to any of the money that is being saved by its users. Piggybank uses a payment processor named Paystack for money collection thereby exempting them from having to deal directly with the funds intended for saving. The company doesn’t make any money from its users who are saving except when a user decides to cash out outside the four periods allowed. It also makes money when it’s bank partner (UBA) invests the total savings on the platform in government securities such as bonds, treasury bills, etc.

Piggybank pays a 6% annual interest rates on your savings which is spread over 4 quarters at 1.5% per quarter. Although your savings plan needs to be active for the company to remit the interest rates to your account. Users on the platform are allowed to add their next of kin. In case of any eventualities, the next of kin can claim your estate. Since Piggybank does not have a banking license (because it is not a bank), the CBN cannot regulate it. The closest CBN has come to regulating it is imposing a savings limit of ₦200,000 per month to forestall money laundering activities. When it comes to money matters especially over the internet, security issues are always on the forefront. Piggybank’s application is highly secured using 256 bits SSL security encryption that ensures complete protection of information.

With Piggybank, you are allowed to set a preferred savings frequency giving you the ability to easily reach your savings target with a few clicks of a button and also earn interests on your savings. The company has a strong customer centricity and shows this by giving its user an opportunity to share their uncensored experiences with its services and also earn money via their referral program. Available on iOS and Android, Piggybankers save an average of N20,000 per month [approx USD$55] and in contrast to conventional bank savings accounts, the platform restricts withdrawals until an agreed date or users can withdraw their savings on a quarterly basis, whereby savings drawn outside of  the agreed day attract a 5% early withdrawal fee.

You can start saving on Piggybank with as low as ₦100. If you start putting away a larger portion of your income, you can grow the gap between what you earn and what you spend and also be setting yourself up for financial success.

Piggybank isn’t just helping its users save money, it is helping them understand the value of money and also tame the beast called “instant gratification”. The platform empowers the awareness of the choice of spending, allowing users put the brakes on instant gratification and use the money to live the lives they really want.

Do not wait to feel you can afford to save – just do it with piggybank.

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