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Part of the guideHow to save in Nigeria when inflation is high
The short answer
Ajo, esusu and adashi groups are excellent at forcing discipline and can give early members a lump sum before they have saved it, but they pay no interest, carry no deposit insurance and depend on trust in the members or collector. A regulated savings app or bank pot pays interest, is protected by regulation and lets you withdraw on your own terms, but relies on your own discipline. Many savers get the best of both by automating app savings on payday and using a group only for a specific lump-sum goal.
Rotating savings are older than any bank in Nigeria and still widely used. The Yoruba call them ajo or esusu, the Igbo use esusu, the Hausa adashi and the Edo osusu. They exist because they work: the group keeps you saving when willpower fails. The question is how they compare with a regulated savings app on cost, return and safety. Our guide to saving in Nigeria when inflation is high covers the full range of formal options.
Three kinds of informal saving
- Rotating group (ajo, esusu, adashi)
- A fixed group contributes a fixed amount on a schedule. Each round, one member takes the whole pot, until everyone has had a turn.
- Daily collector (alajo)
- A collector visits traders or workers daily, takes a small fixed sum and returns the month's total at month-end, keeping a fee for the service.
- Thrift or cooperative society
- A workplace or community group pools savings, often lends to members and may pay a dividend. Some are formally registered as cooperatives; others are informal.
Formal finance has grown alongside them. EFInA's 2023 survey put formal financial inclusion at 64% of adults, up from 56% in 2020, but 26%, about 28.8 million adults, were still financially excluded. For many people, a group or collector is the only savings tool that comes to them.
What a rotating group really costs and pays
Take a group of ten people each paying ₦50,000 a month. Each month one member receives ₦500,000. The scheme runs for ten months.
- The first member receives ₦500,000 in month one, having paid in only ₦50,000. In effect, they get an interest-free loan of ₦450,000, repaid over nine months. That is the real value of a rotating group.
- The last member pays in ₦500,000 over ten months and receives ₦500,000 at the end. They earn nothing. With inflation at 14.63% (September 2026), that ₦500,000 buys what about ₦446,000 bought when the scheme began.
- Members in the middle are somewhere between: early recipients borrow, late recipients lend for free.
Now compare the last member's position with a flexible savings pot paying an illustrative 12% a year, credited monthly. Saving ₦50,000 a month for ten months earns roughly ₦27,500 in interest, or about ₦24,750 after 10% withholding tax. The app wins for a late position; the group wins for an early one.
Why the order of turns matters so much
Because the pot is the same size every month, the whole economics of a rotating group sits in the order of turns. Groups settle it by ballot, by seniority, by need or by letting members bid for early turns. Some groups ask early recipients to pay a little extra, or give late recipients a small bonus, which is a rough way of paying interest. If your group does neither, ask for a turn that matches when you actually need the money, and do not volunteer for the last slot unless you are content to lend to the others for free.
The daily collector
Suppose a trader gives an alajo ₦2,000 a day for 30 days, ₦60,000 in total, and the collector keeps one day's contribution, ₦2,000, as the fee. The trader gets back ₦58,000. That is a cost of about 3.3% a month, or roughly 40% a year if repeated, on money that earns nothing. The service is convenient and the discipline is real, but it is expensive saving. Fees vary; ask before you start.
Side by side
| Rotating group | Daily collector | Savings app or bank pot | |
|---|---|---|---|
| Return | None; early members get an interest-free loan | Negative after the fee | Interest, less 10% withholding tax |
| Discipline | Very strong: social pressure | Strong: someone comes to you | Depends on you; automation helps |
| Access | Fixed turn; swapping depends on the group | Month-end | Any time (flexible) or at maturity (fixed) |
| Safety | Depends on members' honesty | Depends on one person | Licensed bank or MFB; NDIC cover up to the limit |
| Record-keeping | Often informal | Card or notebook | Statements and receipts |
| Recourse if it fails | Social pressure, police, courts | Same | Provider complaints, then the CBN |
The safety question
Informal groups have no deposit insurance and no regulator. With a collector, everything depends on one person's honesty, and people do disappear with a month's takings. Peer-run groups spread that risk but can still collapse if a member who has already collected stops paying. If you join one:
- Join only with people you know and can reach, with a named organiser.
- Agree the rules in writing: amount, dates, order of turns, what happens if someone misses a payment or leaves.
- Pay by bank transfer rather than cash, so every contribution has a record.
- Keep the pot in a bank account in the group's name, not in one person's pocket.
- If you are a late recipient, weigh the free loan you are giving others against what you could earn elsewhere.
Apps carry their own risk if they are not what they seem. Check that a savings app works with a CBN-licensed bank or microfinance bank, or an SEC-registered fund, and that it says so plainly. Our guide is your money safe in a Nigerian fintech? shows how to check.
Thrift and cooperative societies sit between the two. A well-run workplace cooperative with audited accounts, elected officers and a bank account in its own name can be a sound place to save and borrow, and some pay dividends from interest on member loans. A poorly run one carries the same risks as an informal group, with larger sums at stake. Ask to see the latest accounts, how loans to members are approved and how quickly you can withdraw if you leave.
When to use which
- Use a group when you need a lump sum soon and can get an early turn, for stock, a deposit on rent or a business purchase.
- Use an app or bank pot for your emergency fund and for goals where the date is known, such as school fees.
- Combine them if the group is what keeps you saving: pay your contribution by transfer from the same account where your other savings sit, and send your payout straight into a labelled pot for the purpose it was meant for.
For a rough sense of whether any of these keeps pace with prices, see our article on real returns.
Where Pryme fits
Pryme's Savings Boxes (Nigeria-only, in naira) give you labelled pots inside one account, kept apart from your everyday balance. In Nigeria, Naira deposits are held by Solid Allianze Microfinance Bank Ltd, licensed by the CBN and insured by the NDIC up to the applicable limit; each Box's terms in the app set out how that Box is held. The rate for each Box is shown in the app before you commit and can change. Eva, the assistant in the app, can prepare a transfer into a Box, for example on payday, and nothing moves until you approve it, which gives some of the discipline of a group without depending on other members. For group or rotating savings, use a provider that offers it; this guide explains what to look for.
For the full list of formal savings options, return to the main savings guide.
Questions people ask
Is ajo better than a savings app?
It depends on your turn. An early turn in ajo is an interest-free loan, which a savings app cannot match. A late turn earns nothing, while an app pays interest and is regulated. For an emergency fund, an app or bank account is safer.
Is esusu legal in Nigeria?
Informal rotating savings among people who know each other are a long-standing practice. They are not regulated or insured, so members carry the risk themselves. Registered cooperative societies operate under cooperative law.
How much does an alajo collector charge?
Fees vary by collector and area. A common arrangement is for the collector to keep a share of the month's contributions, such as one day's payment. Ask before you start, and work out the fee as a percentage.
What happens if someone runs away with the ajo money?
There is no deposit insurance for informal groups. Members can report it to the police and pursue the person through the courts, which is why written rules and bank-transfer records matter.
Can I do ajo on a savings app?
Some apps offer group or target savings that imitate the habit of ajo. Check that the app works with a licensed bank or MFB and is clear about who holds the money.
Sources
- Ownkey: ajo, esusu and adashi in Nigeria · accessed Oct 2026
- Nairametrics: EFInA 2023 survey, formal financial inclusion at 64% · accessed Oct 2026
- NBS CPI, September 2026: inflation slows to 14.63% (Nairametrics) · accessed Oct 2026
- BusinessDay: why withholding tax was deducted from savings interest · accessed Oct 2026
- ICIR: NDIC raises deposit insurance coverage (May 2024) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.