Thriftr

The informal sector in West-Africa is largely unbanked with majority of the informal sector players lacking access to formal financial services. To access some form of credit they are forced to rely on informal modes of savings depending on credit unions, co-operatives as well as traditional savings and credit schemes (also known as Esusu). These credit schemes are not digitized and are faced with problems such as failure to adequately keep financial data, loss of data, errors in records, delay in withdrawal of funds and lack of credit profiles.

Thriftr is a Savings and Personal Finance Management Platform developed to help digitize the local (Informal) savings schemes in West-Africa to help the unbanked build credit profiles, keep adequate financial data and also provide them with micro-credits. 

If scaled regionally Thriftr will act as a technology solution that digitizes the process of informal credit schemes for financial inclusion of the unbaked.

In Sub-Saharan Africa too many households lack access to financial services, many households don’t have bank accounts and too many small businesses have no recourse to loans. In Nigeria where we currently operate, Over 40% of the adult population are unbanked with West-Africa having over 20% of the world's total unbanked population. Majority of the unbanked are mostly poor, female and are mostly not technologically savvy.

In West-Africa the mass of economic activities is in the informal sector. The informal sector is widely acclaimed for its personal income generation capacity. However due to high level of illiteracy, a lot of informal sector players lack access to formal financial services and resort to some form of rotational savings schemes where they contribute small amounts daily or weekly to improve their businesses or livelihoods. 

Some of the challenges of these contributory savings schemes include:

• Data Loss
• Fraud by collector
• Record Keeping Errors
•  Delay in withdrawal of funds

Why Thriftr?

To bank the unbanked you have to digitize payments and formalize savings. Our solution however allows the 'unbanked' to keep saving through their preferred informal savings/credit schemes but helps them to digitize the entire 'informal' process while also helping them build credit profiles.

Our Solution majorly targets to improve the lives of the low income individuals/families, MSMEs (Micro, Small and Medium Enterprises), Rural households, smallholder farmers, irregular income traders/artisans who are financially excluded. These set of people make up almost 80% of the informal sector in West Africa and comprises mostly women (up to 60%).

Our target market are located in mostly sub-urban and rural communities in markets and farming communities. Since our product launch in January, we have been interacting with potential customers we have received enough feedback that helped us to be able to keep improving the solution while also sensitizing them about some of the benefits of financial inclusion through our network of agents living in these communities.

Our delivery channels are banking agents, local thrift collectors and others like co-operatives societies because most of the informal sector players are already familiar with performing financial transactions through these channels, and so it is easier to reach them through familiar channels, we just digitized their operations to get them financially included.

The solution addresses their need by not only just bringing them into the ambit of formal financial services, it also improves their chances of raising some form of business credit

For a long time is West-Africa, people have been involved in an old micro banking model known as 'Esusu' in Nigeria. These schemes totally relates to Mission Billion Challenge and are more like social protection programs in that it encourages social assistance and social insurance. The challenge is that these schemes are largely unstructured, not digitized and are fraught several challenges. 

Our solution works to digitize these traditional micro 'banking' models that encourages social assistance and social insurance while also providing employment opportunities to those that will acts as managers/collectors in these schemes for good jobs and inclusive entrepreneurship.

Thriftr is innovative in that it deploys the use of mobile-web technology for the digitization of local savings schemes bringing about transparency and accountability in these programs. Many households in Africa before the advent of technology and banks have been involved in one form of social program or the other for the betterment of their communities and livelihoods. 

Even with the rise in banking activities, it is still relatively difficult for the poor at the last mile to access baking products and services, many even believe banking is for the rich and not the poor, hence the only way they can access some form of credit is through these local savings schemes which has it's inherent risks. Thriftr makes it easier for the unbanked living in last mile to still be able to enjoy some of the benefits that those who have access to formal financial services enjoy through banks. This introduces the unbanked into the ambit of financial services.

Some of our competitors are Bankly and SmartTeller. Bankly adopts an agency model (B2B2C) while SmartTeller majorly targets Micro-Finance Institutions (MFIs). Bankly is commission based while smartTeller adopts subscription model. Thriftr employs both B2B and B2B2C model on a single platform which allows us to work directly with direct agents (commission share) as well as independent merchants like co-operative societies or private collectors (Monthly subscriptions).

Thriftr innovations includes a feature that allows people to make contributions directly from their mobile phones using airtime and also a local dialect speaking BOT.

Thriftr is a cloud based Platform as a service (PaaS) application that deploys the use of Progressive Web Applications (PWA). It does not deploy the use of any new technology but a new application of an existing technology, however as we grow we will integrate new features as it may be required to improve the efficiency of the solution. Out target market are not too technologically savvy hence the need to keep the user end as simple as possible but we intend to deploy newer technologies like Artificial intelligence and Geo-location in future updates.

A Progressive Web App (PWA) is a web app that uses modern web capabilities to deliver an app-like experience to users and is accessible through URLs.This allows Thriftr to work for every user, regardless of browser choice, because they are built with progressive enhancements. In areas with low internet penetration the app is able to work offline by displaying a proper "offline" message or caching app data for display purpose and synchronizing data once there is internet connectivity. 

We opted for PWA due to the fact that majority of our target customers might not be too technologically savvy to go to Google Play Store to download the mobile application, we decided to make use of a feature that allows people to add a web application to the home-screen of their mobile phones just as a mobile application would and login anytime they want to without having to type in the URL upon every login attempt.

Because of the unstructured nature of the informal sector in Africa, it is very difficult for benefits to reach many households be it locally or internationally. A lot of many poor households are cut off not just because of where they live but because there is no actual data of these set of people. No birth certificate, no National Identity, banking information or information that can have them access any form of assistance. During the recent pandemic, this is one of the reasons why it was difficult for government to share palliatives because of lack of adequate data of the poor.

Our solution requires us to meet with these people through our agents and or through their groups and associations. We majorly go to markets and meet with heads of market women and men, leaders of informal credit schemes and associations to sensitize them about the benefits of using our platform and why they need to be financially included. 

The output of these meeting is that many of the users of the platform are beginning to understand a little about how formal financial services work and  since they are already familiar with the 'Esusu' system before digitization of the system, they tend to learn from one another.

The immediate outcome is that many of the excluded are brought into the ambit of formal financial services, the users are now more confident in trying to use the platform because they have a feeling of trust unlike when they had doubts about trusting the system 100%. It also has caused a shift in their mentality towards savings and accessing credit facilities because many are scared of micro-finance banks because of abuse and threats when they default on loans.

Future outcomes will be improved public awareness towards the benefits of these social credit schemes and the public will have improved access to formal financial services that will greatly improve their lives and businesses thereby reducing poverty and inequality. In case of future need to share palliatives, the data accrued overtime from several informal schemes will be useful to reaching those who need help. 

For a very long time in West- Africa, people have been involved in one form of social assistance schemes or the other majorly in the form of coming together in a group as farmers, herders, pepper sellers, and so on for the protection of its members. 

Majority of these are manually done and there is no central information portal to document their transactions and contributions. The unstructured nature of their financial activities reduces their chances of benefiting from several opportunities from government interventions and international organizations' support.

Deploying Thriftr into these informal social assistance systems will go a long way in ameliorating this by providing a digital footprint for all their financial transactions. In the event that there is the need to access data of those in the informal sector, for example in a situation when there is the need of sending palliatives to the unbanked just as we experienced during COVID-19 pandemic, the information saved on Thriftr cloud platform will be useful.

It will take quite a while for the whole of Africa to be 'banked' however the digitization ofinformal savings schemes through Thriftr can make it faster through the use of API's Thriftr can work with banks to open Tier-1 accounts for savers on its platform in an open banking system which will be helpful for improving the welfare of users of our platform in the informal sector workers. Financial inclusion is a tool that will greatly help to manage economic and social risks in West Africa.

Thriftr makes use of a simple and attractive user interface for savers. We developed the user interface to be able to be used by anyone who has the least basic knowledge of how to use a smartphone. 

Also we deployed the used of Unstructured Supplementary Service Data Codes (USSD codes) also referred to as quick codes for users of feature phones who may not have access to or smartphone or those who live in communities with low internet penetration. This allows just about anyone to be able to use the platform without worrying about internet connectivity.

The platform also does not require complex Know-Your-Customer (KYC) procedures during the onboarding process unlike in banks where you to have submit some documents before you can open an account. With just the name and phone number, users can start using the platform even though they may be required to provide more information if they need to carry out more complex transactions on the platform.

Through the use of text alerts and other forms of notifications, users get to have a feeling of being part of a structured system just like in a bank. This helps to build their trust and confidence in the system unlike before when many did not trust in the system due.

Through the use of open API's, we are able to work with Payment Gateways,Card Schemes, Digital Banks, Commercial and Micro-Finance Banks, other Fintechs, Credit Bureaus and many Credit/Loan service providers. 

Our portal is able to integrate with other systems easily through the use of APIs because we strongly believe in the concept of open banking.

We deployed the used of Unstructured Supplementary Service Data Codes (USSD codes) also referred to as quick codes for users of feature phones who may not have access to or smartphone or who live in communities with low internet penetration. This allows just about anyone to be able to use the platform.

We are working on a feature that will allow the USSD codes work in local languages for users who may not be able to use the English version. This means when the code is pressed, the menu pops up in the users prefered local dialect for example in Nigeria it can be in either Hausa,Yoruba or Igbo. 

In future we will introduce an AI powered call center feature that will be able to communicate in several languages to help attend to customers via a dedicated help line

For low numeracy and low literacy levels, the system is the same as the local 'Esusu' schemes which means collectors may still make use of paper cards for record keeping as they normally do but will also post collected funds into thier customers Thriftr wallets to allow them receive notifications of transactions. Savers will also still be able to make use of paper cards that they are familiar with but will still receive sms alerts s that when the paper card gets losts, they have something else to fall back to for checking their contribution or borrowings balance. 

The Solution was launched in January 2020 and within 3 months in our immediate community in Ibadan we were able to serve more than 150 customers through 9 agents, the recent COVID-19 pandemic made us to stop our business operations in March.

We estimate to have 500 agents in one year and estimate an average of 50 customers per agent. That means we can serve 25,000 customers (from agents alone) in our first year of launch using both social and conventional marketing. 

We also estimate to have not less than 500 merchants (these are independent collectors who do not wish to be our direct agents and share commissions with us) who will pay subscription fees to use the platform monthly in our first year. 

In 5 years we project to have more than 5,000 collectors with over 300,000 active users on the platform monthly.

Our goal withing the next year in terms of performance is to increase our market share and also help savers on our platform grow their livelihoods and businesses financially.

Most informal sector players are involved in micro-businesses and it is difficult for them to calculate profits but they are aware that they generate enough cash-flow to put aside some of their income daily or weekly. These funds set aside are either for payment of salaries or wages at the end of the month or for purchase of new stock and so on. Majority of these people fall struggle financially to scale up their businesses

In the next five years we aim to have used our platform to lift more than 70% of registers users on our platform our of extreme poverty by offering them micro-credits to improve their micro-businesses and also helping them build credit profiles that will make them have access to bigger forms of credit from banks and other finance institutions.

In the next 5 years, we also aim to have our operations not just in Nigeria but most parts of Africa especially West - Africa.

We started developing Thriftr in August 2019 and launched in January 2020. One of the major challenge we have is our ability to scale our operations due to limited funds. We ran out of runway funds withing 6 months as we didn't have enough working capital to continue business operations.

Lack of funds has greatly affected our plans going forward. We still aim to develop strategic partnerships with many other innovative technology company's through the use of open API's that will further enhance our platform but we currently cannot meet with these technology partners due to lack of adequate funds.

The recent pandemic also affected our business operations due to the economic lock down but with the gradual ease of lock-downs we plan to gradually resume business operations with caution this year to help our team stay safe. 

We also need to be able to gain exposure through international media partners to help promote our brad to international investors.

We are working to raise more investment from local and international investors to be able to generate enough funds to scale our operations.

Thriftr is a product of Finaclus Solutions. Finaclus solutions is a Nigerian Fintech that promotes financial inclusion through agent management, agency banking, innovative electronic payment technology, collection and remittance solutions and services.

Finaclus by means of agency banking and similar financial services helps to integrate the unbanked population into the financial system.

Finaclus has three products

• Thriftr - A savings and personal finance management platform
• Cashia - Agency banking Application
• Bliss - Enterprise Resource Software for Businesses

Finaclus aims to grow to a digital only micro-finance bank and CBN licensed super agent with a super app in future.

We are a team of six (6) working on our solution. 

1. The Head of Business Development who is also the Co-Founder
2. Our Chief Technical Officer who is also the Co-Founder
3. A front-end developer
4. A back-end developer
5.  A Customer Support 
6. A field Marketer.

Ayodeji Odesola, the co-founder of Thriftr is an experienced Banking Agent and Financial Inclusion expert. He is an agent manager and the author of the book on agency banking titled 'Ultimate Guide to Starting Agency banking'. His background in the suburbs of Abeokuta South- West Nigeria and understanding of agency baking and financial inclusion especially in Africa is the primary reason why Thriftr was developed.

As a banking agent in Nigeria, Ayodeji was able to experience first hand the challenges faced by those in the informal sector and how they struggle to get funding for their businesses and often times are faced with the many problems of lacking access to formal financial services. 

Ayodeji wrote the book on agency banking to encourage many youths in Africa to go into agency banking and to understand what financial inclusion is in other to be ale to help in their communities. Ayodeji is the Chief Operating Officer.

Adeyemi Adeshina is the Co-Founder of Thriftr and a programmer who has several years in software developments. His experience of over 10 years was used to develop Thriftr.

We currently do not have partnerships with any major organization.

However, our platform is powered by payment gateway APIs such as Flutterwave.

Thriftr deploys two business models on a single platform. 

1. Employment (B2B2C): This model employs the use of banking agents who register as direct agent and act as service delivery channel to our customers. This is to reduce overhead costs as agency banking model is the future of banking in the world. Revenue generation in this model is through commission share from the convenience fees charged from customers at the end of the month. Agents can use the platform for other value added services such as bill payments, funds transfers and airtime vending. Agents make money from using the platform to carry out transactions for their customers. We provide support for our agents in the form of micro-credit to their customers.
2. Entrepreneur Support (B2B): This model employs 'Platform as a Service' to organizations like co-operative societies and other informal credit schemes. We refer to these category as Merchants. Revenue generation through this model is through monthly subscription fees. Merchants get to choose the plan that suits them based on the amount of customers they have, each plan comes with some free sms monthly. Merchants enjoy the flexibility of the PaaS and the ability to have 100% over revenue generated from their businesses. Merchants provide support to their customers in the form of micro-credit and loans.

As a startup we plan to raise enough investment capital to help us scale our operations within two years of launch after which we would have grown enough customer base to generate revenue from our products and services.

We estimate an average income of $1 dollar per agent's customer monthly and in two years we estimate to have not less than 1,000 agents in Nigeria alone. We estimate an average of 50 savers to an agent. 

50 Savers x 1,000 Agents = 50,000 customers

$1 x 50,000 customers = $50,000

We project to generate not less than $50,000 monthly in commissions alone in the next two years. We will also be generating revenue from other value added services (VAS) such as bill payments and airtime vending from agents and customers using the platform for VAS transactions. 

Apart from monthly commission we will also be generating revenue from sales of SMS bundle to merchants and monthly subscriptions from merchants. We estimate an average if $15 per merchant monthly making a total of $15,000 monthly from merchants in two years and a total revenue of $65,000 monthly from both models in two years.

In the next five years, we will be financially stable and be generating enough revenue to cover our operations and pay off majority of our debts.

We have not been able to raise funds from any external sources or organization but we have been bootstrapping from investments from friends and family members in the form of debt financing.

From August 2019 till date the total investments raised in the form of debt is $25,000.

Between January and February 2020 we generated $315.25 in revenue. Within this period we got several feedback from our customers that we were working on before the economic lock down caused by the Covid-19 pandemic. Below are some of the images from the screenshot of the revenue generated in January and February.

We are seeking to raise not less than $150,000 investment as either grant or debt financing to expand market share, scale and focus on product development. We hope to raise the money in August or September. 

We need funds that will be able to allow us run our business operations for the next 24 months and we believe a sum less than what we are looking at may not be sufficient for our planned expenses going forward.

In the case of debt financing, we seek to have a moratorium of 2 years with another three years to pay back the money making a total of 5 years.

Our Estimated Expenses for 2020 are:

Fixed Costs/Overhead

• Rent - $2,000
• Utility/Phone Bills and Communication costs - $250
• Accounting/Bookkeeping - $1,000
• Legal/Insurance - $2500
• Advertising & Marketing - $7500
• Salaries - $12,000

Total = $25,250

Variable Costs

• Technology - $25,000
• Branding and Banners -  $3,750
• Installation of Solar Inverters - $1,250
• Cost of Fueling Generator - $1,000

Total = $31,000

Total Expenses for 2020 = $56,250

The cost of developing technology such as dedicated USSD channels with Telcos and integrating directly with payment a payment gateway are one time payments. Installation of solar inverter is also a one time expense which will lead to reduction in the costs of fueling generator monthly.

Licencing fees

Licensing fees with the Central bank are quite expensive that is why in the meantime we are working to develop strategic partnerships with banks and other licensed mobile money operators. However, we have license to perform our business operations as a non-bank MFI and a credit organization.

We are applying to the Mission Billion Challenge WURI West Africa Prize to be able to raise capital investments that we can use to used scale up our business operations and also to gain international exposure through it's media partners, work with big technology solution providers and network with professionals (legal) who can help to reposition our brand internationally.

We currently seek investment to the tune of $150,000 to be able to scale up our business operations hampered by the recent COVID-19 outbreak and we believe participating in the Mission Billion Challenge WURI West Africa price is a great opportunity for us to not only get the needed investments but also showcase our solution to the world.

We will love to work with solution technology providers especially in the area of Artificial Intelligence to to improve the efficiency of our platform. We are also open to partnerships that will further help with our service distribution across the West African region while also recruiting the best talents into our team.

However, these cannot done without having enough runway funds that can sustain our business operations for at least 24 months till we are able to start generating enough revenue to break even.

As a startup, we will continue to try to raise more funds as we grow and add more solutions and so we will be needing to legal or regulatory advisors and a professional board of advisors.

In Nigeria we will like to partner with Interswitch as they are the biggest payment gateway in Nigeria. Internationally we will like to partner with VISA or MasterCard for innovative card payment technologies. 

We will also like to partner with Google Expert Developers, The Bill and Melinda Gates Foundation and other International Banks or Organizations working to promote Financial Inclusion and poverty eradication in Sub-Saharan Africa.