As the rising cost of living squeezes the average Nigerian family, increased bank charges have pushed many to abandon formal banking systems in favor of traditional thrift savings, known locally as ajo.
This system, popular in the 1990s, involves individuals contributing daily amounts to a trusted collector, with minimal service fees. Families struggling to meet their financial goals now see ajo as a more predictable and cost-effective alternative.
The recent spike in deposit and withdrawal fees, alongside higher SMS alert charges, has discouraged formal savings. Traders like Mrs. Celestine Ogbebor have reported significant deductions from their deposits, which affect their ability to meet financial targets. Instead of losing thousands to bank charges, contributors now pay as little as N100–N200 in service fees using the local thrift system.
Security concerns have also driven people away from formal banking. Cases of hacked accounts and disappearing funds, such as one mechanic’s loss of N2 million, have eroded trust in banks and even digital wallets. In response, groups have organized their own thrift systems, allowing members to save and access funds without fear of unexpected deductions or fraud.
To ensure accountability and trust, some, like Mrs. Miracle Ajani, have turned to WhatsApp groups for managing their thrift contributions. Members bring their savings in person, and administrators oversee disbursements. This shift reflects a broader trend of Nigerians seeking control over their money in a challenging economy where formal financial systems seem increasingly unreliable and costly.
