Piggybank raises $1.1 million, eyes full-scale banking


A major breakthrough has been recorded in Nigeria’s tech scene as Piggybank, a micro-savings platform has raised $1.1 million in funding.

Piggybank is a wholly-Nigerian venture which started operations in 2016.

The latest raising was sourced from LeadPath Nigeria, with Village Capital and Ventures Platform contributing $50,000 each.

In an interview given to TechCrunch, Somto Ifezue, Odunayo Eweniyi and Joshua Chibueze, founders of the startup said “The market that we are trying to serve is largely the millennial market, though we do not exclude anyone,” said Eweniyi, the company’s chief operating officer. The venture also looks to meet a demand in Nigeria for accessible investment options, citing a survey they conducted indicating that as a top priority for people with discretionary income.

“Piggybank offers savings, but our vision is not just savings, but to become a holistic platform — a financial warehouse — where other financial providers can plug in their services for PiggyBank users.”

There are bigger plans for this startup as it looks towards getting a banking license. This is expected to be a micro-finance license that is expected to enable Piggybank to deploy some of its excess liquidity into lending and financing opportunities.

Analysts suggested that Piggybank’s plan to get a banking license will serve several purposes. First is to get some kind of regulatory cover for its operations would it want to get more ambitious in creating more products and business units. The Central of Nigeria, CBN, might in the nearest future carry-out a benign clampdown on the fintech industry because of their less-scrutiny and self-regulatory status outside of the purview of the CBN. Getting a banking license no matter how small it is would enable Piggybank to escape the ‘doomsday’.

Analysts also look at the competitive side of things. Piggybank is now up against direct and indirect players, many of whom are owned and bankrolled by medium-sized lenders who have the cash to throw around. Last week, Sterling Bank Plc launched I-invest app, a fixed income platform that allows anyone invest in the treasury bills market for as low as N100,000. Wema Bank, another medium lender has since launched ALAT, a full-scale digital banking app that provides both savings and lending services.

Several other large-sized lenders are now firing marketing bullets to push savings and lending features in their mobile apps. To get a banking license will be a wise decision at the end of the day should the team come up with a model that will make their business sustainable.

However, there are major hurdles on its way. Getting a banking license might be its undoing. There are statutory requirements that come with it. Piggybank would be required to hire more experienced and professionally-endorsed CEO, CFO and other key hands that will run the bank. When coupled with the rigour and financial resources that will be needed to run at least one or two physical branches (which might be required by the CBN), its cost and expenditure are expected to hit an all-time high figure.

Piggybank is up against veteran bankers and investment experts who see their foray into fintech as ‘ego-venture’ and a ‘me too’ operations, they will stop at nothing to match and outdo its plans and product offerings.