Cowrywise set to help 10 million Nigerians invest in Mutual Funds with its retail Mutual Funds’ platform

Named as one of the top 50 emerging startups to watch in 2019 and backed by Y Combinator, Cowrywise is democratising access to premium financial products. RAZAQ AHMED, CFA, Ceo/co-founder of Cowrywise revealed in this interview with DOLAPO ASHIRU on how the Fintech company is leveraging technology to deliver on its vision of empowering the mass market with guided access to savings and investment products.

Cowrywise was established in 2017, a difficult year for Nigeria. Tell us how it has been running a successful fintech business so far?

As with any other business in a developing country, it has been a mix of electrifying and exigent experiences. Electrifying because we have enjoyed massive reception from various quarters, who feel quite elated about our product offerings that help them do better with building wealth when compared to traditional options. On the other hand, it has been a demanding experience as we have had to commit extra effort to promoting trust in the platform and also intensive education for the masses on planning money so as to help them do better with saving and investing. Interestingly, these demands have provided us with the opportunity to introduce groundbreaking innovations into the ecosystem.

During the early days of fintech businesses in Nigeria, it was believed that they were here to displace the existing players. What was Cowrywise approach? Was it to disrupt the status quo?

The definition of disruption is often limited to a quest for the displacement of existing players. That is far from the truth, disruption can also be about creating new processes that make it possible for existing players to function better with the help of the new but efficient players. In essence, our disruptive approach has been focused on building bridges. A number of traditional players have rigid processes but are still trusted by the masses, while firms like ours offer seamless processes we battle against trust. What we have done in the past two years is to build partnerships with the old boys so as to overhaul the investment experience of Nigerians. It has been a positive sum game so far and the customers are happier for it.

Cowrywise was listed as one of the 50 global startups to watch out for in 2019. Tell us more about your journey to that enviable recognition.

We are really honoured to be recognised among the 50 companies across the world in the Kairos 50 companies published in Inc Magazine. It is a big boost to the Nigerian startup and fintech ecosystem. It is a recognition of the work we are doing in democratising access to premium wealth management services by making services such as financial planning, savings and investment easily understood and accessible by everyone. It is about building shared prosperity through innovative approach to financial inclusion.

Tell us about how this disruptive approach has played out so far?

Pretty well I must say. For example, at the start of our journey we wanted to offer our clients the same security structure as pension funds regardless of the amount invested. To achieve this we had to partner with Meristem Trustees; bear in mind that we were the first fintech to explore this security feature. It is a move we are totally proud of. Today, a number of fintechs have taken a cue from us and are using the exact structure for the security of their funds. I think the most interesting benefit of this approach, so far, can be seen in our recent partnership with high- flying investment houses to retail mutual funds at NGN100 and make it extremely simple to understand for the mass market.

Mutual Funds at NGN100? That sounds interesting. Can you expand on this? ( Laughs) Sure, I mean it’s surprising that you can now purchase mutual funds for the same price as two sausage rolls, right?

Well, as I mentioned earlier we are focused on building bridges. Prior to this offer from us, it cost between NGN2,000 to NGN10,000 to participate in the mutual funds’ industry. That price peg was a complete disregard for the reality of the regular Nigerian. Aside the price peg, millions of Nigerians hardly understand what mutual fund is or how it works. It is seen as a black box. We are breaking down those barriers by making it super simple to understand and invest in. That drive to make the capital market easily understood by the mass market led us to negotiate partnership and collaboration agreements that will make the decision of buying into any mutual fund as simple as buying a pack of noodles. Currently, we have funds from Meristem Wealth Management Limited, Afrinvest Asset Management Limited, Lotus Capital Limited and United Capital Asset Management Limited. More mutual funds will be added as we are making Cowrywise a single source of truth for all mutual funds in Nigeria.

Aside from retailing these funds, what else are you changing?

Retailing the funds is one thing, connecting people with best-fit funds and facilitating hassle-free purchases represent a different set of challenges. As we built the platform, we considered this and integrated a short but effective risk assessment to suggest funds tailored to the risk appetite of the clients. Also, we have significantly cut down on the traditional process, making it possible for people to start investing securely within three to five minutes.

Tell us about your expansion outlook? We have a couple of great goals, you know?

I’ll just state two of them for now. By 2025, we want to be the most credible digital wealth manager directly helping over 10 million Nigerians to invest in mutual funds alone. Looking at the current figures which sit at less than 400,000 we are looking at a boost of 2,400% to make this happen. It sounds like a far reach, but given our experiences in the last two years, we are confident that it is possible. Secondly, we hope to be a pan-african wealthtech in the coming years as we look to expand our reach to African countries already demanding for our services.

With the low level of talents in the ecosystem, how do you go about finding talents?

I honestly do not believe that we lack talents in the ecosystem, I just believe that founders need to be patient enough to groom talents from their raw states to fine diamonds. Now, this is not to disregard the evident brain drain of fine talents from the ecosystem, it is just to remind us of the fact that a lot of times we are focused on seeking out refined talents. Though it is tough, the process of identifying potentials and working closely with them to hone their skills has been the major talents feeder for us.