Mobile Savings Account, MSA (or e-ajo)

Mobile Savings Account, MSA, seeks to digitalize 'ajo.' Ajo is an ancient or traditional means of savings in West Africa where an individual goes round on daily basis to collect daily savings from registered people. This pull of funds is returned to the respective contributors after a stipulated period of time, less certain amount deducted as service charge. Ajo is still operational today, both in urban and rural dwellings in Nigeria. Digitalization of ajo to MSA (e-ajo) will increase financial inclusion. The digital platform replaces the person who would normally go round to collect savings from registered customers. It will be much more effective and further strengthens acceptance and integrity. It will operate like Value Added Service, VAS platform, that will be the deposit money bank in the case of savings or a PFA to be used for micro-pension collection

The specific problem to be resolved is in the area of reduction of vulnerabilities of informal sector workers due to absence of savings or pension by informal sector workers, which may arise in the event of a pandemic, disaster or other economic shock.

With a population of about a 190million people, research shows that 73.2 million adults representing 41.6% of the adult population in Nigeria are financially excluded. This makes it impossible to save or even contribute to any pension scheme. These people rely on cash availability and are left at the mercy of disasters and other vulnerabilities. MSA will provide the under-listed solutions:

• Reduce the percentage of unbanked population in Nigeria and increase financial inclusion, ultimately reducing the prevalence of poverty in Nigeria; a 1% increase in the number of rural people banked per capital would reduce the rural poverty by 0.42% and increase economic productivity by 0.34%
• Reduction in vulnerability of informal sector workers to shock as they can easily draw from their MSA account in response to any shock. The vulnerabilities may arise from pandemic, displacement, locust epidemic, loss of jobs e.t.c
• Overcoming traditional barriers to banking for the unbanked, or access to pension service.

The target population for this service is largely the unbanked, which includes about 73.2million adults in Nigeria, many of whom are farmers and daily wage earners. As reported by nairametrics, on online data platform, about one in five adults report having a formal bank account. Also, this service targets EMS workers, many of whom are not in the social safety net like pensions, life insurance and others, and are therefore still very much susceptible to the effect of economic shock.

In trying to understand the needs of this category of Nigerians, it is very clear that they are financially excluded, making it difficult to access any form of financial support. Already, in a 2011 poll of Nigeria's unbanked populace, 61% expressed a desire to have an account, but there was no bank close enough to make their simple wishes a reality. Therefore, the idea is to leverage on this statistics to engage them using an already existing traditional savings concept-'ajo' social media platforms traditional rulers and village heads.

The solution will address their need to save, especially those who are financially excluded, give a safety net for the informal sector workforce- the primary drivers of economic activity.

WURI seeks tech based solutions that facilitate portable contributions to social insurance programs, by informal sector workers in Africa. My proposed solution is Mobile Savings Account- a digital based solution that will drive on the platform of Value Added Service with telcos to receive contributions based on activated deductions per airtime and data recharge. This may be withdrawn in the event of an occurrence or after a specified period of time. The target population is the financially excluded which forms about 41% of Nigeria's population, and the workers in the informal sector. This is over 73million Nigerians!