Digital Microsavings Need Clear Pathway to Pump Life into African Economies

Kenyan president William Ruto’s recent calls for an African savings culture to bolster economies will not be possible without concerted action to support fintechs offering digital microsavings products, according to members of the AFIS community- Valens Kimenyi (National Bank of Rwanda), Uzoma Dozie (Sparkle), Osamudiame Adams (Mazars), Karan Bhalla (AiVantage Inc.), Joshua Chibueze (Piggyvest) & Jean Yenga (Visa)

Government-backed savings schemes such as Rwanda’s Ejo Heza voluntary savings programme (2.8 million active subscribers and supported by MTN, Airtel, Mobicash and Bank of Kigali) have made strides to encourage savings for low-income groups. But such government subsidised initiatives will not be sustainable long-term and private sector-led innovation will be needed to alleviate pressure on public purses.

Mobile money, with 33% of Sub-Saharan African adults now holding accounts, has paved the way for fintechs to develop innovative digital savings solutions. But despite ample economic benefits few digital savings options exist for Africans and those that do lack critical mass.

Why does it matter?

Digitalising savings could help individuals prove creditworthiness for future lending, encourage increased long-term consumer spending and lead savers to eventually become investors. Customer deposits could also be deployed to expand credit to local businesses and invest in government securities, corporate bonds or pension funds to support economic growth.

A combined effort is required from governments, regulators, fintechs and traditional financial institutions to ensure uptake of digital savings, protect customer deposits, and to channel capital towards national development.


Africans even on low incomes save. A survey by fintech Piggyvest found 64% of Nigerians, earning less than N100,000 ($125 a month), save a portion of their monthly income.  Saving for some is a necessity with rents in certain West African countries paid a year in advance. But many save outside the financial system in ways that do not benefit national economies.

Decades of currency volatility have eroded trust in saving in financial institutions, adding to the hurdle of making physical cash deposits at faraway bank branches.

Consequently, African savers frequently resort to stockpiling non-perishable foods or US dollars, storing cash at home, acquiring land or livestock, or more recently investing in cryptoassets.

Others engage with informal rotating savings and credit associations, which take different names across countries: Chamas in Kenya; Njangi in Cameroon; and Tontine in Morocco.

Africa’s young population with a median age of 19 and increasing mobile penetration (43% in 2022 and predicted to rise to 50% by 2030) offer a strong opportunity for fintechs not weighed down by the legacy systems of commercial banks to digitalise savings.


Customer psychology must be understood before applying technologies. A government-led effort to engage informal savings and credit groups will be crucial to identify customer needs.

The Central Bank of Rwanda for example conducts an annual survey of informal savings groups, gathering data on their membership and the size of their savings. Findings are published on the central bank’s website, enabling financial institutions to identify and target potential customers.

Fintechs can then develop products catered to the needs of members. Nigerian fintech Sparkle has for instance developed its ‘Esusu’ feature – derived for the name for informal credit & savings groups for the Yoruba people – allowing groups and families to save together digitally.

However, products will still need to win consumer trust.


A return of your money is better than a return on your money. Secure saving options that inspire consumer trust outweigh high-interest savings accounts that carry risks.

Trust can also be won by designing ultra-flexible savings products linked to lifestyles that are marketed in local languages with transparent and understandable terms & conditions.

Allowing customers to open multiple interest-earning wallets for customisable goals – for example for housing, farm investment or child tuition fees – can help savings fintechs demonstrate convenience.

With the average Sub-Saharan African earning $140 a month, deposits to interesting-yielding accounts should start as low as $0.05 cents with flexibility to save daily, monthly, weekly or even as a fixed percentage off any debit transaction. Those living hand-to-mouth should also be able to withdraw savings regularly with minimum penalties.

Digital savings products with such flexibility exist, but the fintechs behind them will require partnerships to scale and build trust.


Commercial banks, insurers and real estate partners could be fundamental to reassure digital savers that their assets are protected from local currency volatility.

Funding from legacy commercial banks can support resource-strapped savings fintechs to mitigate risk and expand to multiple countries that would allow them to hedge currency risks.

Partnerships between fintechs and non-financial industry players could also allow savers to store their funds in less volatile tokenised assets, such as a fraction of real estate or gold, opening up markets previously unattainable for many.


Governments must play an active role in the early stages to expand internet infrastructure and educate populations on digital savings. Fintechs often offer a bundle of services and do not have resources to promote all products, so existing saving options can lack consumer awareness.  While government-led financial education programmes exist, few educate on digital financial services. Initiatives like Rwanda’s Cashless Week, focused on promoting digital payments and encouraging digital saving, could demonstrate the benefits of digitalising savings.


With educated tech entrepreneurs offering complex digital products to undereducated populations, a tailored regulatory framework may be necessary to ensure customers are not incurring unjust charges and are receiving quality service delivery, such as limited downtime for apps and efficient complaints handling systems. Any framework should ensure products are understandable to customers whose first language may not be English or French. Trialling digital microsaving innovations in regulatory sandboxes could help to develop geographically appropriate frameworks.


The next evolution for savings will be low-entry point investing on fintech platforms. But this again will not succeed without partnerships. African stock exchanges are hugely underfunded and lack mass-market participation. Partnerships giving fintechs outlets to invest customer deposits or create customer investment opportunities via peer-to-peer (P2P) lending and crowdfunding could allow savers to invest in micro-entrepreneurs such as market vendors and farmers. Partnerships linking fintechs to small businesses could stimulate economies, but traditional financial institutions, such as insurers, will be needed to hedge risks. Recently promising initiatives from Nigerian agtechs allowing investors to sponsor farmers and recoup +30% interest rates at harvest time collapsed due to crop failures that were not hedged. A digital microsavings and investments culture for the mass-market holds vast potential to invigorate African economies but will only function if traditional financial institutions and governments back microsaving fintechs.

These recommendations build on a strategic roundtable on digital microsavings held at the Africa Financial Industry Summit – AFIS 2023 in Lomé, Togo, on 15 & 16 November 2023.

Signed by AFIS community members:

  • •          Valens Kimenyi, Director of Financial Sector Development and Inclusion, National Bank of Rwanda
  • •          Uzoma Dozie, CEO, Sparkle
  • •          Osamudiame Adams, Partner, Mazars
  • •          Karan Bhalla, CEO, AiVantage Inc.
  • •          Joshua Chibueze, Cofounder, Piggyvest
  • •          Jean Yenga, Fintech Business Development Manager, Western & Central Africa, Visa CEMEA, Visa

Compiled & edited by Oliver Nieburg

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