Financial literacy remains a barrier for young people, with millennials struggling to meet their financial goals and not saving effectively. South African fintech startup Akiba Digital thinks it has the solution.
Formed last year, Akiba is building a data-driven personalised financial marketplace, initially offering two digital solutions. Their first solution, launched two months ago and available for download, is a gamified savings tool that allows users to save towards their lifestyle goals and get rewarded for it.
This is coupled with a rainy-day-fund pre-configured for users where a portion of their contributions to their active goals is passively saved to serve as a cushion for their future.
The second solution, which is launching soon, is a web-based financial literacy platform that repurposes existing content created by financial service providers. Akiba co-founder Kamogelo Kekana told Disrupt Africa the startup’s goal was to help tech-savvy millennials become financially confident to start making good financial decisions.
“We believe our value proposition to our users is a combination of tools which includes incentivising positive spending and savings behaviours, fun-financial curated literacy, a goal-based setting approach to our lifestyle, behavioural coaching and accountability, all in a fun and quirky gamified experience. Once people have a better understanding of their finances, they will be better equipped to make informed and effective life decisions,” Kekana said.
The Akiba team came together last year, initially building a digital bank. However, having built the majority of the product, it was faced with greater regulatory requirements than its bootstrapped budget allowed.
“We stripped away everything else and kept the element that we believed was most important and unique to the mission of building the bank in the first place: the need to change consumer credit and spending behaviour, and extend tools that further empowered consumers to do better with their money,” said Kekana.
Those consumers are millennials, who Kekana said are feeling greater financial strain and require a means to make their money stretch further. He said people in this age group crave a way of becoming “financially woke” but cannot relate to financial service providers, and simply just do not trust them.
“On the other side, financial service providers are desperately seeking more non-traditional information about millennial customers, in an attempt to offer personalised financial products. But they continue struggling to engage this demographic,” he said.
“And whilst the disconnect between millennials and FSPs continues to grow, as a country we are faced with the challenge of South Africa having one of the worst personal financial literacy rates in the world.”
Akiba, which is currently raising its seed round, is trying to solve this, and is doing so with the support of Startupbootcamp and AlphaCode. It is currently beta testing with around 300 active users, and was recently the fourth highest trending app in the finance category in South Africa. It has already signed on three corporate clients.
“Currently we are operating in South Africa and plan to create a sustainable base in this market with most of our team based here. Our expansion plans over the next 24 months include doing some soft launches into tech-active markets on the rest of the African continent, as well as accessing certain parts of the Eurozone through partnerships we are currently working on,” Kekana said.
Akiba has both B2C and B2B models. It charges consumers early withdrawal penalty fees on their total goal value and on interest gained over the period saved for, while its B2B model sees it offer corporate partners tiered packages that will offer a variety of benefits dependent on the needs of the customer.