CowryWise to ‘democratise’ asset, wealth management in Nigeria

CowryWise, a Nigerian Fintech company, has commenced operations with the aim of making personal savings, asset and wealth management accessible to even low-income earners.

The company is leveraging on the accessibility of its internet-based distribution channel, and a low minimum savings amount required.

Until now, asset and wealth management in Nigeria has been accessible mainly to a few high net-worth individuals and the corporates. With the minimum amount required by banks for such accounts set at some millions of naira, many low-income savers were effectively excluded.

Now, with as low as N100, someone can sign on to its platform and begin to save, says CEO and co-Founder, Ahmed Razaq. “It is meant for everybody,” says Razaq. “The idea is that everyone can save and earn a decent interest on it.”

Signing on to CowryWise’s platform is done via the Internet – on a laptop or smartphone, “and savers can do that on the go.” The regulator of the country’s telecom sector, Nigerian Communications Commission (NCC), had put telephone density in Nigeria (number telephone lines per 100) was 102.19 by the end of June 2017, according to information available on its website.  It also put the number of mobile phone subscribers with Internet subscription was 91.6 million.

CowryWise invests the savings in risk-free government securities, and earns income from a spread above the returns promised to savers. Average Treasury bill rate in Nigeria currently range between 13 percent for 90-day bills, and 18 percent for 364-day securities.

CowryWise hopes to attract some of the currently unbanked Nigerians. A 2016 survey by EFInA – Enhancing Financial Innovation and Access – showed that 41.6 per cent of Nigeria’s 96.4 million adults were excluded from the banking system.

Razaq expects that CowryWise will also attract depositors who are dissatisfied with the 4.2 per cent they currently earn from their savings accounts from banks, if they do not withdraw from such accounts more than four times a month; otherwise they forfeit interest for that month. With savings accounts accessible through ATM cards, he says many bank customers end up earning much less on their savings deposits.

“What we want to achieve is to separate savings from what ATM cards can access, and for investors to earn something on them.”