Monday, September 02, 2019 / 08:00PM / By Cowrywise / Content & Header Image by Cowrywise
From dollar-based investments to everyday mutual funds, Cowrywise is driving the democratization of wealth management in Nigeria
In the past few years, the Nigerian financial space has been an interesting one to observe. We have seen the entry of nimble startups, their glorious and stagnant moments, and the undeniable change that has come with them. An outstanding member of the new entrants is Cowrywise -a micro investment platform. Various pointers distinguish Cowrywise from the host of other similar firms. In this article, we'll expand on them.
Pioneer Security Structure
Upon entry into the fintech space, Cowrywise recognized a key issue little or no regulation. Hence, it was quite impossible to legally assure users of the security of their funds.
Taking a cue from pension funds, the founding team went on to establish a trustee partnership with Meristem Trustees. This agreement was established in June 2017. With that in place, it was a lot easier to put the fears of investors to rest.
As with any brilliant industrial innovation, a number of similar firms have followed suit. In turn, this has not only benefitted the firm but also the consumers and players within the space. Consumer security sits at the core of the regulator's focus.
In 2017, when the firm launched, it started off with a web app that offered three products:
As it evolved, a mobile app was created in 2018. With the mobile app came additional online saving features:
"We have taken out time to carefully ensure that every investment product on our platform is under strict regulatory watch. This enables us to prevent undue exposure. The average Nigerian investor is still learning the ropes, so it is very important that we protect and grow their faith in the system." - Razaq Ahmed (CEO, Cowrywise)
These allow for automated daily, weekly, or monthly investments of a set amount. Asides from the automated schedule, users can top up whenever they want to. A good use case for most users is a rent-payment plan.
Interestingly, they offer up to 15% per annum with 10% per annum as the lowest offering. The rates depend on how long the savings are invested. That is, the longer the tenure, the closer you get to 15% per annum.
If one wants to deposit a large chunk of cash and leave it to grow, Cowrywise has a plan for that. The same interest rates apply here. Although, it is impossible to top-up a fixed plan after the first deposit.
Save As You Earn
Now, if the fixed investment option seems rigid and the automated option still doesn't work, there is still a plan for you. This works like a fixed investment, but it can be topped up anytime you want.
These replicate the communal spirit of local group savings. It takes things steps further by offering juicy interest rates, committed donations and improved transparency.
It is not uncommon knowledge that a number of Muslims are opposed to earning interest. To improve its accessibility, Cowrywise opened up interest-free plans. That way, it is possible for Muslims to enjoy 100% discipline without the fear of committing any sin.
All stated plans have a minimum maturity period of three months. Users are free to set any maturity date that equates to three months or is above that. For long term plans, Cowrywise offers Life Goals. They operate like periodic investments but have a minimum lock-up period of one year.
After months of rigorous negotiations, Cowrywise was able to achieve a significant feat. They have been able to aggregate four prominent mutual fund managers in Nigeria. That way, it is possible for users to compare various funds and make more informed choices right from one app.
To make its offering stronger, its users can start with as little as NGN100. This pilot amount is limited to Naira-denominated mutual funds. For dollar-denominated mutual funds, the limit is $100.
How to Get Started
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