Piggybank.ng closed $1.1M in seed funding and announced a new product — Smart Target, which offers a more secure and higher return option for Esusu or Ajo group savings clubs common across West Africa.
Founded in 2016, by Somto Ifezue, Odunayo Eweniyi and Joshua Chibueze, 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.
Users need an account with one of PiggyBank.ng’s 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 itself generates revenue through asset management and from the float its balances generate at partner banks.
The startup looks to grow clients across younger Nigerians and the country’s 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’s 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 has 53,000 registered users — 60 percent of whom are Nigerian Millennials — who have saved in excess of $5M since 2016, according to a release.
Joshua Chibueze, Co-Founder and CMO of Piggybank says, “Today’s announcement allows us to expand and capitalise on the many opportunities that the market presents us with. Our growth so far has been stimulated almost entirely by peer-to-peer advocacy and our investment in the highest quality customer service, so we know the market is there, and the product has been built, modified, tested and ratified by users. With this fundraiser, we can invest significantly in our people and products, as we build a digital financial warehouse accessible to millions of Africans whose savings woes we want to put firmly behind them.”
In addition to securing its seed funding of $1.1 million, Piggybank.ng has recently acquired a micro-financing license from the Central Bank of Nigeria (CBN), which provides the relevant regulatory cover, allowing them independence from partnering with banks.