Nigerian fintech expands offerings as startups continue to put banks on their toes

Nigerian Financial Technology (FinTech) start-up this week announced that it is changing its name from Piggybank to PiggyVest in order to have a much broader and holistic financial management platform

“This evolution represents PiggyVest’s determination to ensure that their services continuously evolve with the needs of their customers,” said  Co-founder and CEO, Somto Ifezue.

The name change comes with an enhanced platform which will offer more services such as insurance and group investment options.

This move to have a name that reflects wht they do comes nine months after it raised a seed funding of $1.1 million in order to grow its online savings business. This sum was gotten from a group of almost exclusive Nigerian investors, led by Olumide Soyombo, Co-Founder of Leadpath.

Prior to raising the seed funding, the FinTech company founded in 2016 by Somto Ifezue, Joshua Chibueze and Odunayo Eweniyi were able to increase its users by 3000 percent in one year of operation despite the economic challenges that Nigeria faced in 2017. It also recorded 20 – 35 percent month on month growth in user traction over 12 months. The PiggyBank community was able to save $5 million, boosting investor confidence.

Piggybank was able to achieve all these by lowering its operational costs such as marketing cost and rent. It also only relied on peer-to-peer recommendations such as PiggyVest Stories, and grassroots social media campaigns. The success of Piggybank is among the numerous success stories that have been recorded by several FinTech companies who were able to raise millions of dollars in funding from investors.

The company has grown its community to over 195,000 registered individuals who save over N1 billion monthly.

Nigeria, a cash-driven economy, is responding well to the growing opportunity in FinTech. This is seen in how transactions from mobile money in the country grew to $142.8 million in 2016 from $5 million recorded in 2011. This growth in FinTech penetration in the country has been attributed to an increase in the number of smartphone users in the country. A recent report published by Jumia revealed that the number of Nigeria’s mobile subscribers has reached 162 million, and the number of its internet users has climbed to 97.2 million representing penetration rates of about 100 percent and 83 percent respectively.

Nigeria now boasts of over 60 FinTech companies, which includes Paga, Interswitch, etranzact, Remita, Paystack and Kongapay. FinTech companies have made access to financial services very easy and most commercial banks in Nigeria are also integrating FinTech into their operations to capture more of the online market. 

FinTech has helped beef up the conventional mode of carrying out transactions by financial service providers, using technology to make people do what they need to do when they need to do it without having to go through stress. However, the recent trend in increasing saving culture in Nigeria has brought one of the major functions of banks to be done by FinTech companies such as PiggyVest.

And because of the growth of financial tech in Nigeria, there is a rising fear among traditionalists about the potential for FinTech firms to take over the Nigerian financial sector, by becoming the largest financial services providers in the country.