For millions of young Nigerians, earning a regular salary doesn’t necessarily mean access to capital. While many have the discipline to save and maintain bank accounts, raising a substantial amount of money to pursue personal ambitions remains a persistent financial challenge.
Africa is home to the youngest workforce in the world, yet even its formal wage earners face a steep challenge accessing capital. Traditional banks reject up to 80 percent of consumer credit applications due to strict collateral requirements, such as land titles or assets worth up to 150 percent of the credit value, that young professionals early in their careers often cannot meet, according to a 2025 survey from Solutions Financial Services.
This exposes an important gap in Nigeria’s financial inclusion landscape: access to financial services does not automatically translate into access to affordable capital.
The problem is particularly significant for young working Nigerians between 22 and 40, many of whom are building careers, establishing households and pursuing entrepreneurial opportunities without having accumulated enough assets to qualify for conventional credit.
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Consequently, people increasingly rely on informal financial arrangements, personal networks, and community savings schemes to meet financial commitments. Among these arrangements, ‘Ajo’ remains one of the most enduring examples of how communities organise access to money outside conventional banking structures.
The economics behind Ajo
Ajo works because it addresses the timing problem associated with personal savings.
Under the traditional arrangement, a group of people agrees to contribute a fixed amount at regular intervals, with each member receiving the accumulated contributions in turns. Rather than waiting several months or years to accumulate a substantial amount independently, participants can access a lump sum earlier while continuing to contribute towards subsequent collections.
The model is built around pooled liquidity, collective discipline, and trust. Members effectively bring together their individual savings to create a larger pool of money that becomes accessible to participants according to an agreed schedule.
For a salary earner who needs to raise money for accommodation, school fees or business equipment, this arrangement can provide access to capital without the interest charges associated with conventional borrowing.
Its appeal also reflects an important economic reality: people do not always need additional income to improve their financial position; sometimes they need better access to the income they are already earning.
Ajo allows participants to reorganise their savings around the timing of their financial needs. It turns individual contributions into a mechanism for accessing larger sums, making it particularly relevant to people who have predictable incomes but limited access to formal credit.
Where the informal model breaks down
Trust, which is ajo’s greatest strength, can also become its biggest vulnerability.
In many traditional arrangements, contributions are managed by an administrator who collects money, maintains records, and distributes the accumulated funds. Where there are no institutional safeguards, participants depend largely on personal relationships and the administrator’s integrity.
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The consequences can be serious when an administrator disappears with the contributions or a member stops paying after receiving their allocation. Because participants have limited formal protection, recovering their money can become difficult, particularly when the arrangement is based on informal agreements.
The problem becomes more complicated as groups expand beyond family members, colleagues and people with established relationships. Participants may not know one another, making it harder to assess reliability or enforce agreed obligations.
These weaknesses do not undermine the underlying economics of ajo. Rather, they reveal the limitations of relying exclusively on personal trust to manage financial arrangements involving multiple participants.
The opportunity, therefore, is not to replace community savings with conventional lending but to strengthen the structure through which people pool and access capital.
A new route to accessing capital
One emerging approach is to combine the collective savings principle of ajo with the institutional safeguards of a regulated digital platform.
Rank, a CBN-licensed wealth management platform, is introducing Money Circles, a zero-interest capital product built around this model.
Money Circles is a modern, safer version of traditional group savings such as Ajo, Esusu and Rotational Savings and Credit Associations (ROSCAs). Users can access zero-interest capital by joining a circle and committing to monthly contributions. When their slot arrives, they receive an agreed lump sum and continue making their regular contributions, paying only a fixed service fee based on their payout position.
For example, a member can receive ₦100,000 upfront and contribute ₦10,000 monthly over 10 months, without interest or collateral.
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Unlike traditional ajo arrangements where an individual administrator holds and distributes contributions, Rank manages the funds and guarantees every payout under the product’s stated structure.
Participants can select a circle that matches their financial capacity and join an existing group without necessarily knowing the other members. The platform also provides a bonus for the member in the last position, recognising the value of waiting until the final collection.
Importantly, members are responsible for their individual contributions, while Rank guarantees payouts, meaning another participant’s default will not affect an individual’s entitlement.
Contributions and payment schedules are managed through the application, offering a stress-free alternative to paper-based group savings, traditional debt, and predatory loan apps. Money Circles are open to anyone, and users must complete Rank’s KYC process to access the product.
Chinwe Michael is a Nigerian business journalist and media professional with over 4 years of experience covering companies, financial markets, banking, fintech, economic policy, financial inclusion, and corporate affairs. She currently leads the Companies & Markets desk at BusinessDay, where she drives coverage of Nigeria’s corporate and capital markets, translates complex financial data into accessible stories, and mentors younger journalists. Prior to that, she was the head of the financial inclusion/fintech desk. With a background in banking and finance and extensive experience in media and communications, Michael has developed expertise in financial journalism, economic analysis, investigative reporting and market intelligence. Her work examines how monetary policy, corporate performance, capital flows, technology, and regulatory decisions affect businesses, investors, and households. She was selected from about 3,000 applicants as one of 20 journalists for Cohort 4 of the MTN Media Innovation Programme, gaining exposure to new approaches to journalism, technology, and media innovation. Her international journalism experience and engagement with professionals across Russia, Dubai, Saudi Arabia, and others in different sectors have further broadened her understanding of global communication and development.
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