The CEO of Toju, young Nigerian entrepreneur Adeola Ajayi, believes that lack of access to basic financial services is a leading cause of Nigeria’s growing poverty and believes the key to solving this problem is by enabling more Nigerians to have access to formal savings and loan accounts in regulated financial institutions.
Nigeria is the largest economy in Africa and is home to over 200 million people. Despite its large population, only 58.4% of Nigeria’s adult population has access to financial services, making it one of the world’s least financially inclusive countries.
This lack of access to financial services has significant negative impacts on the country’s economy and citizens.
“However, looking deeper, you would discover the so-called unbanked aren’t completely unbanked but banked differently,” said Adeola Ajayi
While a small percentage of Nigerians have bank accounts, the vast majority of the adult population in Nigeria saves in a different way.
It is a pre-colonial manual banking method that extends beyond Nigeria to the shores and west Africa, as well as Latin American countries such as Cuba and Brazil.
It entails a local financial provider visiting individuals to collect a set savings amount each day for 30 days. 42% of adult Nigerians use Ajo savings, according to Eflina reports.
This savings method is very successful because there is little access to banking services in rural areas and few MSMEs are financially literate. Sadly, Ajo as a saving technique is far from ideal.
“When I was an undergraduate student at the university, I first learned about this method of saving. I ran a small laptop repair shop at the time in the bustling Alaba International Market. (Notably, it is the biggest electronics market in Africa.)”, he stated.
Given that the majority of local savings collectors are unregulated, they have the freedom to decide to steal customers’ savings without having to worry about facing any serious repercussions. In 2013, he and a large number of his coworkers at Alaba International went through that.
“We all lost money we had saved for more than a year, and to this day, it hasn’t been recovered,” Adeola Ajayi said
After joining Accion Venture Lab AVL in 2019, he made the decision to return to the same market and speak with his old friends to learn about the difficulties they were facing. The subject of lost savings kept coming up, and the narrative was consistent in all of the markets he visited.
Toju set out to solve this problem by allowing local savings collectors to open formal bank accounts for their customers from the comfort of their smartphones. In less than 6 months, Toju has helped more than 10,000 people save their money daily through this savings collector.
“The startup takes a small fee for facilitating these transactions, and currently, we process around US$150,000 every month,” he said
By helping more Nigerians access basic financial services in regulated financial institutions, they are less likely to be victims of rouge savings collectors and loan predators; this is the main goal of Adeola’s initiative.
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