I will like to begin with the definition of “Osusu”. Also known as “Esusu”, it is a practice commonly found in West Africa. “Osusu” is a kind of micro savings scheme where some individuals come together to put a certain amount aside and the individuals take turns to collect the total sum for their personal use every month. Monies can be collected daily, weekly or even monthly. The communal sum of money would act as a form of community saving, with members able to take money out when they needed.
Now this is what Martin Ijaha, CEO of Neyber, said influenced the idea behind the fintech startup. He left Goldman Sachs in 2012 to co-found Neyber with Monica Kalia, and ex-Goldman Sachs colleague and Ezechi Britton, a former Credit Suisse technology specialist.
Five years later, Goldman Sachs is now investing $100 million, a mixture of debt and equity into this company. Exiting investors, led by former Deutsche Bank COO Henry Ritchotte and Gael de Boissard, the former cohead of Credit Suisse’s investment bank, also chipped in an extra £15 million of lending capital for Neyber.
Martin says the equity investment will be used to fund the development of new products, including a savings account based on salary deductions and new borrowing products.
According to Martin in his interview with Business Insider, “After leaving Goldman, even during my time at Goldman, I was looking at fintech. At that time it was defined by peer-to-peer lending, which I found interesting but really I thought there were a few fundamental flaws. There wasn’t a real value proposition for borrowers. It was largely targeting those who could already get loans from banks. I didn’t really feel that it was a sufficient solution.”
Thinking about how he might do something better for borrowers, he remembered his mother taking part in Osusu, a West African savings club tradition.
“She was a nurse. They would go to work and they would have this savings club that they called Osusu, which effectively meant they put some amount of money, £50, into a pot every time they were paid. One of them would take the money home at the end of that month.”
The communal pot would act as a form of community saving, with members able to take money out when they needed.
“I just remember the experience of my mother coming back with £50 notes when it was her turn,” says Ijaha. “That was their way of helping each other save and also make sure they could borrow at reasonable rates because effectively there weren’t any rates. They did this for years and it worked.”
Martin took this idea to his former headmaster at St. Charles in West London, who was enthusiastic about the idea because his employees had been asking him for salary advances. Using the school as a pilot, he found out that the demand was even higher than he had thought. Neyber lent them up to £1,500 at a rate of up to 7.9%
Thereafter, he went on to convince the mutual insurance for the UK police, Police Mutual, to sign up. Police Mutual also invested £50 million which Neyber would use to lend to police officers. The fintech lent to the police officers at 7% instead of the bank rate of 30%.
To date, Neyber says it has given loans in excess of £70 million and is currently working with more than 80 employers including DHL, Anglian Water and 10 NHS trusts.
