Nigerian fintechs turn to automated wealth tools as inflation erodes savings value
As inflation continues to erode the value of cash holdings in Nigeria, digital lenders and microfinance banks are increasingly pushing automated wealth tools to help retail customers protect their purchasing power, senior executives at FairMoney Microfinance Bank have said.
As inflation continues to erode the value of cash holdings in Nigeria, digital lenders and microfinance banks are increasingly pushing automated wealth tools to help retail customers protect their purchasing power, senior executives at FairMoney Microfinance Bank have said.
Speaking during a roundtable interview, Chinwe Iwobi, the bank’s head of wealth management, and Feyishetan Akinyemi, head of treasury, said traditional savings accounts are no longer sufficient in a high-inflation environment, where nominal interest rates often lag far behind rising consumer prices.
They explained that many standard bank accounts offer returns of around five percent, which translates into negative real returns when adjusted for inflation. “Traditional savings may grow your account balance, but they shrink your lifestyle,” Iwobi said, noting that the bank now focuses on real returns, a measure of how much value money retains after inflation.
Nigeria has faced persistent double-digit inflation in recent years, weakening confidence in the naira and pushing many individuals to seek alternative stores of value. However, for a large segment of the population without access to complex investment products, options remain limited.
FairMoney said it is trying to bridge that gap by embedding structured wealth strategies into its mobile app, allowing users to access higher-yield savings products while maintaining flexibility and discipline.
Products such as FairSave and FairTarget are designed to guide users into what the bank describes as wealth tracks, combining higher returns with behavioural nudges like goal-based savings and restricted withdrawals.
According to Feyishetan Akinyemi, head of treasury, these features help users stay invested long enough to benefit from compounding, rather than reacting to short-term price increases.
“In a high-inflation environment, interest rates alone do not solve the problem. Structure and discipline are just as important,” she said.
The bank also allows customers to split funds across different tenors, effectively creating a simple investment portfolio that balances liquidity with higher returns. This approach, executives say, helps users preserve value even while operating entirely in naira-denominated assets.
Beyond product design, FairMoney is leveraging technology to expand access to wealth management services that were previously limited to high-net-worth individuals. By operating a fully digital platform, the bank said it has significantly reduced operating costs, enabling it to offer competitive yields with low entry thresholds.
“Technology allows us to remove the barriers that made wealth management exclusive. Customers with small amounts can now access structured products that replicate disciplined investment strategies,” Chinwe Iwobi, the bank’s head of wealth management.
Analysts say this shift reflects a broader trend in Nigeria’s financial sector, where fintech firms are using automation and data to democratise access to financial services, particularly as economic pressures mount.
FairMoney also highlighted the broader economic implications of digitised savings, noting that aggregated retail deposits can serve as a stable source of domestic capital. The bank said customer funds are channelled into government securities and high-quality credit assets in line with regulatory guidelines, supporting both public financing and private sector growth.
Operating under the oversight of the Central Bank of Nigeria, the Securities and Exchange Commission, and the Nigeria Deposit Insurance Corporation, the lender said its model ensures that savings are not only protected but also productively deployed within the financial system.
This, executives argue, aligns with Nigeria’s long-term ambition to build a $1 trillion economy by deepening financial inclusion and mobilising domestic capital.
To address behavioural challenges, the bank said it has built automation features that encourage disciplined investing, even as inflation pressures consumers to spend quickly. These include default savings contributions, withdrawal restrictions on goal-based accounts, and automatic reinvestment of returns.
“In an inflationary environment, the instinct is to spend immediately, but that leads to wealth erosion. What we are doing is designing systems that make discipline automatic,” Akinyemi said.
Industry observers note that while such tools cannot eliminate macroeconomic risks, they may offer a practical hedge for retail savers navigating persistent inflation and currency pressures.
