Electronic Esusu

Over 38 millions Nigerians are financial excluded. Most often, they indulge in regular thrift collections also known as ESUSU where a collector collects certain amount of money from customers physically and at the end of a month, he takes a fraction of the money for the services rendered. Both the esusu collectors and their contributors are posed with the following problems of traditional and manual savings scheme.

• Too Much Paper work leading to Loss of Data due & Errors.

• High Risk of Handling Cash resulting in robberies, fraud & other cash related Crimes.

• Inaccessibility to Digital Financial Services & Low Access to Credit

• Operational inefficiency leading to wastage of time & efforts.

• Low Financial Literacy and Distrust of Financial Services

According to the EFINA Access to Financial Services Survey 2020, The Descriptive Analysis of the report shows that out of 99 million Adult Nigerians, 38 million are financially excluded, 44% are male and 56% are female, where 71% own or use a mobile phone, 60% are between 18-35 years old and 79% live in Rural areas.

The Data Analysis of the survey further reinstated that 38.6% of them saved in a bank, 9.7% save with other financial institution, 42.7% save informally and 33% save with family and friends. This further enhanced our data driven research to identify the largest financial excluded state according to the 6 Geopolitical zones of Nigeria which are as follows:

S/N

REGION

STATE

FINANCIAL EXCLUSION RATE

1.

South-West

Ondo

29%

2

South -East

Ebonyi

44%

3

South-South

Bayelsa

35%

4

North-Central

Nassarawa

40%

5

North West

Kano

75%

6

North East

Gombe

76%

Electronic Esusu is a digital finance management solution designed to automate the process of thrift savings, collection and microcredit enhancing digital financial service delivery for the unbanked and under-banked.

The solution explores Cloud and Mobile technology to enhance transactions of the Esusu scheme. The system also provides members and management of esusu schemes with instant information on any transaction made (SMS/Email Alerts) guaranteeing security of data and information.

We’ve built a robust inter-operable platform designed for Esusu collectors to drive Esusu operations and digital financial services seamlessly for the unbanked across several e-channels.

We provide standard operating procedures for Esusu collectors to efficiently enhance their Esusu operations. Importantly, we have also initiated a risk management framework with insurance policies for both the Esusu collectors and contributors to mitigate against the risks of esusu echemes.

The system also provides members and management of esusu schemes with instant information on any transaction made (SMS/Email Alerts) guaranteeing security of data and information.

We also conduct agent training and management to nurture responsive and smart Esusu collectors and managers deepening financial inclusion services to the last mile.

HOW IT WORKS

Through our Web and Mobile App on Google Playstore, We onboard and verify Esusu merchants such as Thrift Collectors, Cooperative Societies, Microfinance Institutions and Mobile Money Agents, who then registers this unbanked customers, mobilize esusu deposits, facilitates withdrawal and other digital financial services in a fast and secured system. The system also provides members and management of the Esusu schemes with instant transaction alerts via SMS and EMAIL real-time and it guarantees security of data and information. 

Target Beneficiaries

A. Business to Business

- Independent Thrift Collectors, Mobile Money and Bank Agents,

- Cooperative Societies, Microfinance Institutions, Non Government

Organizations, Government, Micro Insurance Firms and Micro Pension

firms as well as the Banks.

B. Business to Customer: 

Unbanked and Under-banked: petty traders,

farmers, artisans, construction workers, etc who live in rural and peri-urban

areas. Banked: Students, Salary earners, civil servants, debit card holders, etc.

The Project brings a lot of benefits to the Thrifts Collector, the thrift contributor as well as the national financial systems.

Thrift Contributors:
- They need assurance about the safety of their cash
- They need access to other financial products
- They need access to other digital products
- They need financial information to plan
- They need tools that enable them to plan their finances
- They are protected against natural calamities like fire and flood
- All these are provided for in ESUSU AFRICA

Thrift Collectors / Cooperatives:
- They require accurate records at all time which the system now provide
- They need protection against robbery and theft, which is now provided
- They require a tools for reconciliation, which is now provided
- They need information on the go, which is provided
The Government:
- The Government will have access to data on informal savings schemes
- We will assist to deepen the Policy of the government on Financial
inclusion.
- The network will be used for other social and environmental development
services.
- Avenue to deepen financial inclusion policy of the government among the
un-reached.
-
4
The Financial Institutions:
- Insurance company have the opportunity to offer micro insurance
products
- Micro Pension company will use this platform to promote their products
- Micro-Lenders/ digital lenders can use this platform to offer credit to
micro businesses
- Ability to migrate contributors to formal financial institutions
- A platform for agency banking creation

Our passionate and vibrant team brings a wealth of experience in business development, financial inclusion, microfinance banking, mobile money, agency banking, ethical finance and digital financial services.

In the past years, I was involved in field supervision and collection of rent payments from several shop tenants at market based centres in Lagos, Nigeria. During my experience, I discovered the huge gap of digitization in the process of thrift savings and collections by thrift collectors posed with challenges of manual record keeping leading to data losses and errors, misappropriation of funds by thrift collectors and inaccessibility of formal financial services. In tackling this challenges was why I founded Electronic Esusu: a digital platform that automates thrift savings, collections and microcredit enhancing access to digital financial services to the last mile.

As a Microfinance Certified Professional, I have also gathered influential experience working as Agent Aggregator with several mobile money operators in Nigeria.

We have an In-house Engineering team that handles the code and technical work on our products. It is being headed by my CTO, Akinade Ayodeji who's deepened experience of value-based product development using Agile practices and management of product release following best practices.

Currently, we have over 257 active corporate clients cut across local thrift collectors, microfinance institutions, cooperative societies. They have onboarded over 64,000 customers into digital finance leveraging our platform.

“Esusu is a unique savings concept that is very peculiar to Africa’s unbanked population. Digitizing Esusu would revolutionize the informal sector towards deepening financial and economic inclusion for everyone.”

Considering our participation at MIT Solve 2023, we are aimed at exploring the wealth of experienced professionals, network of corporate partners, investors and other ecosystem enablers towards enhancing our institutional capacity, technical assistance and access to funding towards scaling Esusu for more greater inclusive impacts.

The Project is aimed at promoting gender equality—the shared control of

resources and decision-making—and women's empowerment are central to an
intervention. More women are involved in ESUSU collection and Savings, they
enjoy more trust among the populace.

New Products and Innovative Services can be layered upon the ESUSU
SAVINGS CONCEPT such as Microcredit, micro insurance, micro-pension,
micro-mortgage, micro-asset leasing/procurement, etc.
Capacity Building Seminars such as our Monthly Esusu Managers workshop,
agency banking seminars, financial inclusion trainings has been highly influential in enhancing the entry of agents and players towards strengthening financial inclusion to the last mile. However, the team at ESUSU will require further training and exposure to horn our skill set.

- We plan to reach 200,000 contributors in 2024
- We target to reach 5,000 thrift collectors / agents in 2024
- To focus 60% of our energy on Northern Nigeria in 2024
- To work closely with Farming communities and women group
- To create financial inclusion awareness in key selected states in
Nigeria.

Digitization of Thrift Savings and Collection

The system involves the use of Global System Mobile (GSM) device to transact the esusu business, although it involves two way approaches on the system of payment. These are Cash Payment System (CPS) and Electronic Payment System (EPS).
Cash Payment System (CPS): This involves the use of GSM devices which is now common business men and women, the unbanked inclusive. It involves
the collector collecting cash from each of the customers at their business points in their respective shops. The collector after each collection sends SMS to the office. The information passes through a gateway and hits the collector’s till box. A till box is an account the collector keeps with the back
end office. The information is stored and an alert of the amount received from the customer is sent back to the customer. The customer receives the message through SMS on his GSM device. The alert takes place in microsecond such that the collector would still be in the customer’s office while
the customer receives the alert if network is stable.

 Customer receives alert via mobile phone after making cash payment.

The Esusu office is registered with a commercial bank or financial institution that provides commercial services. These services include the use of Automated Payment System and other mobile services. They also have a robust back office and management information system to supervise and monitor all operations of field officers and cashiers real-time.

Withdrawal of Money: CPS involves the use of Automated Payment Systems (APS) to withdraw money unlike the current practice of a collector bringing cash to the customer on request. The use of APS such as ATMS (Automated Teller Machines), POS (Point of Sales) Terminals, Online banking and Mobile Money channels, banks, etc, is ideal since the Esusu office is registered with a bank or a financial institution that provides commercial services. For example, The ATMs are mounted at strategic places in markets where customers will have access to withdraw money at any time. This process may be executed through a hybrid EMV Chip and PIN payment card or executed
through electronic mobile money wallet which is otherwise called CARDLESS
WITHRAWALS.

Customer received their money through ATMs installed in markets.

2. Electronic / Mobile Payment System: This involves the use of GSM devices, but instead of cash payments or withdrawals, it involves the use of mobile money transfers. The system involves the collector visiting each customer and if the customer chooses to use mobile money transfer approach, the transfer is made. Once the transfer is made, it reflects on collector’s GSM device. The collector transfers the transaction to the base office which credits the customer and sends a credit alert back to the customer. The same method is applied in withdrawal. The customer informs the collector of his intention to withdraw money. The money after checks and confirmation is transferred to the customer’s GSM device.

Benefits of the Solution

Impact Goals for the next five years

1. DIGITAL FINANCE FOR 1 MILLION UNBANKED : digitization of thrift savings scheme through the Esusu
Management System.

2. INCLUSIVE FINANCE FOR 1 MILLION UNBANKED: deepening financial inclusion services through the
Esusu Investment Platform to allow for micro insurance, micro-pensions and
micro investments to its target users.

3. CASH-Lite FINANCE FOR 1 MILLION PEOPLE: leveraging on electronic payment methods such as
USSD, POS, WEB, MOBILE, ATM, etc.

4. COOPERATIVE FINANCING FOR 1 MILLION MEMBERS: Automating the group contribution process for
debit card and bank account holders.

5. AGENCY NETWORK DEVELOPMENT FOR 100,000 AGENTS: building a smart and responsive agent network through
quick service points (kiosks).

6. ETHICAL FINANCE FOR 1 MILLION PEOPLE: promoting alternative financing and non interest banking
services.

Goals for the Next Year

- We plan to reach 200,000  esusu contributors in 2024
- We target to reach 5,000 thrift collectors / agents in 2024
- To focus 60% of our energy on Northern Nigeria in 2024
- To work closely with Farming communities and women group in 2024
- To create financial inclusion awareness in key selected states in
Nigeria
- To work with women in petty trading, local snack production, restaurants and vocational services in Nigeria.

How to Achieve the Goals.

- To scale  Esusu Management System (EMS) to the market.
- To organize regular Esusu managers’ workshop, training and financial
literacy programs/campaigns for agents and their customers.
- To Support Integration with all digital financial and payment service
providers to enhance inter-operability of platforms that will serve the
bottom of the pyramid and the unreached.
- To Introduce Merchant App for financial service providers to aid
management of Esusu schemes for debit card and bank account holders.
- Deploy E-Esusu Kiosks and Quick Service Points to expand agent and
customer reach in every rural community.
- To provide Data for government and the industry which will help national
development
- To deepen financial inclusion and access to credit to breaking the barriers for MSME finance.

We will measure the success of the idea by the following metrics:

1. Number of Thrift Collectors, Cooperative Societies, Microfinance Institutions and Mobile Financial Services Agent That Actively uses the platform.

2. Total number of beneficiaries that are migrated from unbanked to banked status through bank account opening and other digital financial services.

3. Total number of Esusu Savings and Loans that are processed for beneficiaries on the platform.

4. Number of Esusu Management Workshop, Financial Literacy and Women Empowerment Programs.

• Value of Revenue generated from monthly subscription & commission

• Total value of Withdrawal Transactions

• Total value of Savings Balance

A high percentage of Nigerian population is unbanked. These are mainly petty traders, small scale enterprise owners, farmers and artisans who live in rural and urban areas. Most often, they indulge in daily contributions also known as esusu where a collector collects certain amount of money from customers and at the end of a month, the collector takes a fraction of the money for the services rendered. 

One major way of improving the esusu scheme is by creating a platform that would enable the members to save money and as well have ability to access microcredit in a fast and secured system. Our Electronic Esusu platform explores the use of Cloud technology and Global System Mobile device to manage and enhance transactions of the esusu scheme. The system also provides members and management of esusu schemes with instant information on any transaction made and it guarantees security of data and information. This is one of the digital transformative change that has disrupted the informal financial ecosystem. Most traditional financial service providers have deem it very necessary to embrace and adopt digital platforms to accelerate their thrift savings, credit and collection business towards enhancing financial inclusion at the last mile.

Reference: African Journal of Basic & Applied Sciences 8 (2): 90-95, 2016 ISSN IDOSI Publications, 2016 DOI: /idosi.ajbas Digitization of ESUSU Thrift Savings Scheme in Nigeria 1 2 Nwosu John Nwachukwu and Mmoh Stella Uchenna 1 Department of Computer Science, Federal Polytechnic, Oko, Anambra State, Nigeria 2 Department of Banking and Finance, Anambra State University, Uli,

The Electronic Esusu platform explores the use of Cloud technology and Global System Mobile device to provide management information system, back office system and digital tools to the management and members of microfinance institutions with instant information on every transaction made via SMS/EMAIL/USSD and it guarantees security of data and information.

The technology comprises PHP and MySQL for the back-end with Several Third Party Integrations through Secured APIs. The Front-end is powered by Javascript, Jquery, Angular JS and Wordpress. The Mobile App is currently developed with Android Infrastructure. We have Integrated the platform with several payment service providers and platforms.

 We are providing digital platforms that enables local thrift collectors, cooperative societies and microfinance institutions scale their operations, revenue and impact leveraging several digital channels such as Web Portal, Mobile App, USSD and POS. This would simplify access to affordable and appropriate digital financial services enhancing financial inclusion to the last mile.  

The system also provides management information system, back office system and digital tools to the management and members of microfinance institutions with instant information on every transaction made via SMS/EMAIL/USSD and it guarantees security of data and information.

The Digital Tools / Platforms are:

1. Digital Microfinance Management and Cooperative Banking System

2. Mobile POS terminals and Bluetooth Printers to facilitates Agent Banking and Digital Financial Services.

3. USSD and Shortcode Infrastructure to enhance offline transactions.

4. Solar Powered Quick Service Points and Kiosks to enhance delivery of digital financial services at Rural Locations.

5. Prepaid Card Management System to facilitates Cash in and Cash Out transactions.

6. Cloud Hosting Infrastructure Provider such as Microsoft Azure, Google Cloud, etc.

7. Biometric Fingerprint Device and Management Systems.

8. Other Supporting Technology Infrastructures that directly or indirectly enhances the workability of the idea.

Our passionate and vibrant team brings a wealth of experience in business development, financial inclusion, microfinance banking, mobile money, agency banking, ethical finance and digital financial services.

The Project is aimed at promoting gender equality—the shared control of resources and decision-making—and women's empowerment are central to an

intervention. More women are involved in ESUSU collection and Savings, they
enjoy more trust among the populace
From the EFINA research 2018, more women are outside of the formal financial net in Nigeria. However, the rate of financial exclusion is estimated to be over 35% un the urban area with the figure getting higher in rural settings.

In Nigeria Alone, we have 56% of the Financial Excluded are women. Our goal is to dedicate 65% to benefit women so as to reduce the exclusion
rate. This will mean better access to health care and social inclusion.