The need to introduce a structured group savings and loans (ajo) platform for salary earners in Nigeria
June 11, 2019
The need to introduce a structured group savings and loans (ajo) platform for salary earners in Nigeria
Savings and loans – Are you an employee, salary earner, did you always have a need for cash before pay day of course yes, probably to settle your rent, pay school fees, travel for vacation and of course meet other pressing financial needs that may arise before pay day here in Nigeria?
If any of the above scenarios applies to you, I wish to say congratulations in advance, here’s a platform that cares for your financial needs in Nigeria without going to the bank, for obvious reasons the bank may not really be your best deal for this type of financial assistance, after reading what I’m about to reveal to you in this post.
Read carefully and follow the link therein to source funds without going through mountains of paper work and collateral, yes you heard me say so (savings and loans)!!
Given the inadequacy of the formal financial sector in Nigeria for low-income and semi-literate Nigerians, contributory savings, or thrift collection schemes are very popular among market women and communal dwellers in the country.
These schemes, known as Ajo, Esusu or Adashe, in the South-West, South-East, and North respectively, link socially connected people (e.g. market women, friends, etc.) to work towards a common goal of saving money. They are highly profitable, regulated, and help people form long-term bonds that extend beyond just savings.
Ajo(Monthly Contribution) has helped people pay for emergencies, rent, school fees,vacation, buy land, motorcycles and cars, and even build small apartments.
The success of the Esusu savings and loans model has led to its replication in formal work environments through cooperatives, credit unions and ROSCAs (Rotational Savings and Credit Associations). While there are numerous advantages to many of these schemes, they still face challenges that limit their growth and scale.
Firstly, the offline operational model limits the number of participants a communal savings group can hold at a time, as group rules & regulations such as strict payment timelines become more difficult to keep and enforce as members increase.
Prompt collection and payout also becomes more difficult to manage at scale. Lately, commercial banks and other financial institutions have entered the fray, churning out apps that help customers save with friends and family towards a financial goal. However, despite the benefits of automation and digitization of savings these apps offer, they still don’t solve the fundamental problem of discovery.
Secondly, the probability of finding people within the same income bracket among just friends and family is low. Searching beyond friends and family brings up an issue of trust. Besides, bank-owned group savings products restrict participation to only the bank’s customers, thus further limiting discovery, expansion and flexibility.
Access to credit still comes at a great cost to working class Nigerians, with minimum interest rates of 24% per annum from commercial banks, and rates as high as 60% P.A from micro finance banks.
It faces other challenges like credit availability, In Nigeria, lending remains concentrated to sectors where tangible assets are available and, in a bid, to reduce non-performing loans (NPLs), lending houses appear to have become rigid and risk averse, especially when it comes to individual lending.
Lastly, credit options in this part of the world are limited. While more developed countries have an array of formal financial institutions offering credit in the form of private equity, venture capital, credit union loans and peer to peer-financing, the financial sector in Nigeria is limited to banks and non-banks.
It’s on this premise that we built Steward Africa to solve these problems most importantly creating one community for salary earners in Nigeria not minding the sector, location or banking relationship and offer working-class Nigerians a safe, risk-free and convenient way to save with both friends and strangers towards a financial goal and give bulk credit to one another(Ajo in a Digitalized form), savings and loans as well as get access to loan facilities without paying cutthroat rates.
In the area of discovery, StewardAfrica ensures you find the best match for your savings goal, by automatically linking you only with professionals with the capacity and interest to match your monthly contributions as well as encourage people who run such schemes currently offline to come on board and use technology to manage their contributions .
We take preemptive steps to ensure the safety of users’ contributions. We run preemptive credit checks done in partnership with XDS Credit Bureau. StewardAfrica has also partnered with Old Mutual Nigeria for insurance cover against job loss, disability or death (Optional). Automation of payments is via direct debit orders preventing deliberate default on payment, while encouraging savings discipline, in a savings and loans platform.
Steward Africa as an application, is designed to recreate the centuries old offline concept of monthly contribution (AJO) used in most part of the world as an alternative to high cost loans and an avenue that encourages participants to save more through discipline and commitment to the scheme.
The scheme has been reproduced into an online application thereby creating an ecosystem for all interested participants increasing the chances of having an open pool and taking out pitfalls in areas of administration, payment, insurance, connectivity, distance and diversity of all kinds, affording savings and loans.
Value Added Products
Asides our main objective to create an ecosystem for monthly contributors, we equally leverage on the numbers to create some other valuable group and individual products.
1) Steward Africa Bailout– Steward Africa advance verified salary earners 60% of their monthly salary as loan payable over two months.
Unique Value Preposition- You don’t need any further documentation other than information supplied during sign up neither do you need a guarantor to access it.
2)Steward Africa Shared Cost Housing Scheme– This product allows salary earners from different blue-chip companies to come together and pull resources to own apartment (s) each in a building with what it could cost to buy just land in such areas. This initiative equally allows people with land in choice areas to pledge it as equity while they connect with others with financial resources to develop it with each person taking an apartment(s).
Unique Value Preposition- This affords you the opportunity to own an apartment with about what it will cost to own a plot of land in accessible areas where proximity to workstation is never an issue.
3)Steward Africa Next Vacation– This product allows users to save towards their next vacation and travel on a group package with professionals from other reputable companies. This serves as a good networking tool and an avenue to renew the mind and take off stress.
Unique Value Preposition- Here you can buy into middle term travel plans which allows users to save between 4-6 months unlike the short-term travel plans sold by most travel agencies currently. Also, you have the opportunity of visiting beautiful destinations with other business professionals from other reputable companies. This is a good networking platform.
4)Steward Africa Save4Rent– This product allows users to save towards their next rent. Here, users get free credit life insurance cover against job loss, disability or death in the course of saving and in situations where we don’t have any of these eventualities, users get 5% interest on average balance payable upon completion of target savings.
Unique Value Preposition- You have an insured savings product targeted at rent where your savings is insured against Job loss, disability or death at no extra cost with guaranteed interest payment of 5% on average balance in the event of no eventuality.
5)Steward Africa Lifestyle Discounts – This product allows users to have 2% discount on all land purchased from Merit Abode Limited. Also, users get discount when they buy their air tickets using the search engine on our homepage.
Benefits of Using Steward Africa Application
1-It allows you to save MORE money using our cooperative savings approach system which gives the needed discipline and commitment to save more than you do currently. Research has shown over the years that saving money in groups triples the success rate
2- It gives you access to secure and automated PEER to PEER credit which gives credit at ZERO percent unlike bank loans that could be as high as 60% PA
3-Our insured target savings product offers free credit life insurance cover against job loss, disability or death over the savings period with guaranteed savings interest on average balance.
4- Through our shared cost housing plan, you can own an apartment with what it will cost to buy a plot of land in such areas.
5- You can start to finish setting up a standing instruction/debit mandate on your account from your laptop or mobile phone without physically visiting any of your bank branches and the app can interacts with all commercial bank accounts in Nigeria. Hence, you are not restricted to any particular banking relationship.
6- It allows users to save towards visiting new places around the world yearly. Unlike most travel packages with short notice, Steward Africa organized travel packages are medium and long term which allows users to save towards it. Also, our professional group travel packages are good networking tools for business executives. We equally organize yearly games bonding sessions to bring together virtual users to bond and build lasting relationships.
7- In addition, you can equally enjoy negotiated discounts from our lifestyle partners through our lifestyle discount offerings
Steward Africa Unique Value Proposition
1) Steward Africa offers a secure Peer to Peer Credit platform that gives BULK CREDIT at ZERO interest rate unlike bank loan that is between 22%-60%PA
2) Steward Africa offers a holistic approach to finance. It offers savings, credit, insurance as well as investment options
3) The application interacts with all commercial bank account in Nigeria. Hence you are not restricted to any banking relationship. All that’s required is to download mandate form, complete it, scan/snap with a scanner or mobile phone and upload on the app
4) The application is strictly for salary earners. In other words, we can say its demographic specific i.e. we pull together people with similar social and economic beliefs.
5)Guaranteed target savings. With our credit life insurance option on monthly contribution and our Save4Rent products, users are guaranteed to have their target savings in the event of job loss, disability or death
We are building holistic digital finance solutions leveraging on numbers to reduce cost so as to help Africans live richer (via savings and loans), more fulfilling lives through savings, investment and easy access to credit. Why don’t you join us today? Its a web based application and can be accessed via URL www.stewardafrica.org.ng . Follow us @stewardafrica, Call/WhatsApp +2349071154023 or email firstname.lastname@example.org for more information
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Raphael Orji is a freelance writer, professional blogger and a content marketing consultant. I work with small businesses, startups and entrepreneurs in building their brand image with high quality blogging and content marketing strategy.
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