CircleFunds, a brave startup from Lagos, is doing away with the old communal savings method, Ajo – the tried-and-true way which for a long time has been the means by which Nigerians pool funds to pay for things like rent, educational fees, and business capital.
In Nigeria, where the trust in digital banking is still shaky, this innovative company has its torch lit by the past to guide the way to the future.
The Co-founder and Chief Executive Officer, Sogo Ogundowole, said that trust is not something that technology just creates. “It is not built through beautiful applications or nice-sounding words of marketing,” Ogundowole said in an interview with Punch newspaper. .
“Trust comes from being open, continuously dependable and, by dealing with people in their usual places.”
It is a circle fundraising, social savings nature that is at the core of a successful blend of tradition and technology, and through these successful harmonious ventures to maintain security and safety in a community that has been deeply entwined with the idea, CircleFunds sets their vision to be the medium, a platform, or a portal that will bridge the gap between an age-old setup, the digital landscape of finance interaction, and thus bring back the lost trust of many Nigerians;
Ogundowole said. “It results from being open, consistent, and platforms that genuinely improve people’s lives. At CircleFunds, we are creating that trust through the formalization of the Nigerian people’s time-honored practice of group savings,” he added.
Nigerians had been relying on Ajo which is also called Esusu in different areas, for quite a long time, to save together within safe social frameworks. The norm had it that people pay a set sum into a common pot, and the money is handed over to one of the members on a rotational basis.
Essentially, the method depends heavily on personal relationships and social standing. Nevertheless, the digital age has thrown up issues such as fraud, poor record-keeping, and default risks that have led to the demise of informal savings groups. To deal with these issues CircleFunds is coming up with a security system that will not compromise the community spirit.
“People have been relying on Ajo or informal saving groups through WhatsApp and Telegram for years. These communities already have solid trust foundations, which enable them to save collectively,” Ogundowole explained.
“What we are doing is simply giving them better security and structure for their savings through digital means. Our clients may save a fixed amount with a verified individual, and I take care of the technical aspects such as tracking, keeping records, and making sure that each transaction is secure,” he said.
Ogundowole said that over 10,000 people from Nigeria had taken the route of using CircleFunds to save together for such things as school fees, housing fees, or the starting of a small business.
“Technology should not be designed to replace people’s current habits; instead, it should support them,” he said. “When people see their trusted communal saving ways working smoothly and transparently online, that’s when trust in digital finance starts to grow naturally.”
However, the move of Ajo to the online world is not without risks. In the past, the success of the system depended on people’s integrity and personal contact. However, Ogundowole is of the opinion that digitization can alleviate some of those risks.
“Ajo is a system based on people’s relationships, but that doesn’t imply it is risk-free,” he explained. “Traditional Ajo situations have poor record-keeping, arrears, and the issue of disputes when contributions get lost or someone’s default. Our goal in digitizing Ajo is not to replace human trust with that of machines; instead, it is to support human trust.”
CircleFunds verifies each user’s identity, makes the process of subscriptions and withdrawals easy via automation, and offers transparent transaction records that give the participants total control allowing them to access every transaction at the same time that it is being done.
