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Cowrywise is a personal finance app that enables people save by making automated deductions from their account. Money saved is then invested in money market securities. Cowrywise is registered with the Corporate Affairs Commission (CAC) and Lagos State Government as a cooperative and multipurpose society.

Cowrywise.com is run by a team of 3 comprising Razak Ahmed, Edward Popoola, and Feyisayo Shonubi. Razak serves as the CEO (Chief Executive Officer) of the company, Edward the Chief Techonology Officer (CTO), while Feyisayo is in charge of product design.

Target market for the app are small savers who the team feels are underserved by the banks. Interest rates by banks are around3-4% per annum, excluding account maintenance fees and other charges. Banks also tend to focus on large deposits which yield a higher return.

Pros

  • Easy to open: Opening a Cowrywise account took me less than 5 minutes. The instructions are also quite simple.
  • Entry amount is quite low: Minimum amount one can start saving is N100. Other competitors in the same space have a much higher entry level.
  • Automated deductions: The selected amount is automatically deducted from the account linked to the ATM card as at when due.
  • No charges: Cowrywise has no charges for deposits/withdrawals/alerts.
  • Interest accrued is displayed: Interest accrues on a daily basis and is shown in a dashboard that’s clearly displayed.

  • Safety of funds: Depositors funds are warehoused with a trustee (Meristem trustees) for safe keeping.

Cons

  • Website is not mobile friendly: I eventually had to complete my registration using a laptop as the website isn’t easy to navigate using a mobile phone.
  • Age Limit: In what appears to be a bug that has not been resolved, the age limit for the profile is put at 1960.
  • One product: Aside saving, Cowrywise offers no other investment options.

What do they do with depositors funds ?

Depositors funds are invested in money market securities. Money market securities are short term assets with a maturity period of one year or less. They include Treasury bills, Bankers acceptances, and Commercial papers. In order to guarantee safety, the funds are warehoused with Meristem trustees.

How do they make money ?

Operating online means Cowrywise is able to avoid the costs of running a conventional brick and mortar bank.

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Alternatives or competition

Cowrywise doesn’t operate alone in this space. Other alternatives include piggybank.ng Piggybank offers a mobile app on IOS and Android, but has a higher minimum amount that can be saved. Piggybank also offers a maximum interest rate of 25% paid upfront, if customers are willing to lock a fixed amount.

Can Cowrywise scale?

In an era where almost every commercial bank has a mobile app and in the case of Alat, a wholly digital bank, this app will have a hard time scaling except there are collaborations with other firms in the financial services sector.
In the event of money market rates dropping to 10%, Cowrywise would be left in a bind, as it would have to offer customers a lower rate.
This is one app im quite excited about as it easy to use and consumers can start saving a small amount and increase progressively. Absence of a mobile app is a drawback as a large percentage of Cowrywise target market access the internet from their phones. Competitors such as Piggybank.ng also have a mobile app.
The app also fails to make provisions for customers the unbanked who do not use conventional banking facilities. Cowrywise needs to look introduce micro lending in order to boost their income and attract a larger customer base.

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Response from Cowrywise

Nairametrics reached out to the team behind Cowrywise after reviewing the app, and they responded to the various issues raised.  Cowrywise has improved the user interface on its website to be more mobile friendly. The team does not see commercial banks as a threat, as their focus is on the unbanked.  As for the age limit , the team has taken note and will rectify it.

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You can get the app at www.cowrywise.com
Please consult a financial adviser before opening an account.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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