Kudimoney commenced operations as an online only lender in January 2017, and having reviewed tens of thousands of customers’ profiles, including spending patterns, it became evident that the problem is not just a lack of credit, but a lack of proper money management. 90% of our customers (with an average age range of between 21 and 38) earned a descent wage, but spent spontaneously in the first half of the month and struggled by the end of the month, especially when they have unexpected expenses such as health or an increase in essential utilities or school fees. Unfortunately this seems to have been the African story, even within government and leadership circles.
Historically, Africa as a continent has experienced years of financial indiscipline, it has been said that a country, or in this case a continent, is a function of the behavior and financial choices of it’s citizens. Poor financial management in Africa is not just a case of poor ratings or a bad credit report. It is literally a life and death situation. Unfortunately in spite of all the obvious pitfalls, majority of Africans particularly the youth segment still lack the motivation or discipline to make the right financial choices.
African traditional banking institutions have not helped, by making banking expensive therefore unattractive for many. Furthermore with all the unnecessary overinflated charges there is a distrust of banks, though there is an unwilling acceptance, as there appears to be no choice of where to keep your money secure.
According to the International Monetary Fund (IMF) Nigeria’s Gross National Savings, % of Gross Domestic Product (GDP) is just 13.14% as at December 31, 2016. Even after factoring in the mandatory contributions in pension funds, it is still almost half of the global average of 25%. A look back 10years shows a Savings to GDP of 32.66% in Nigeria, an alarming decline to present day.
This clear and present danger presents an opportunity to start changing the mindset of young Africans as the future of a continent rests in their hands.
Kudimoney is building a full service digital only bank, and recently launched two savings products, a goals account that allows users to automatically save on a periodic basis, and an instant save account that offers significantly higher interest than traditional banks and other investment products. An interest bearing current account is also on the horizon and will be released in the first quarter of 2018. All this is geared towards encouraging people to save more.
Furthermore, we understand that in our society, even the most disciplined saver can be caught out by unexpected expenses, the Kudimoney low interest instant loans should help bridge such surprises.
We are confident that, through technology, and the right mindset, we can begin to map a better future not just for Kudimoney customers, but for Africans as a whole. Come join us in changing the way Africa thinks about money, visit us today and start saving!