Tunde, a 34-year-old trader in Lagos, embodies a paradox. Despite being well-educated and managing his business online, he still contributes weekly to an Ajo group managed by a neighbour. At the same time, he saves on formal platforms. When asked why he continues with the ajo, he smiles:
“I can see who’s holding my money. I know when I’ll get it. No surprises.”
(Ajo is a traditional West African savings system where members contribute regularly to a collective fund and take turns receiving the pooled sum.)
Why do millions of Africans still rely on informal savings circles when modern credit products promise instant gratification?
However, such conventional systems are usually based on manual record keeping and the trust of one person, hence are subject to mismanagement, conflict, or even deceit. In Nigeria’s digital commerce environment, this trust deficit has deepened with recurring cases of fraud, unfulfilled orders, and the “what I ordered vs what I got” problem eroding confidence in online transactions.
Meanwhile, modern fintech imports such as Buy Now, Pay Later (BNPL) attempt to bridge affordability gaps through credit, but in doing so, they overlook Africa’s savings-first culture. Rather than injecting more debt into fragile households, what is needed is a financial system that empowers people to plan, save, and make sustainable purchases.
The behaviour of Tunde is not unique. Millions of people like him across Nigeria, Kenya, and South Africa cross the boundaries between the formal and informal systems, where they see the most credibility and where they see the most flexibility. It is not that there are no digital tools; it’s a lack of confidence in how money moves.
In our previous article, “Pricing in Africa Needs a Reset: The Rise of Insight-Based Models for Informal Markets” (Afritail, July 2025), we discovered that more than 61% of African consumers have never used Buy Now, Pay Later (BNPL), and another 25% thought about it but ultimately decided against it, primarily because they would rather save money before making a purchase. African consumers are aspirational, debt-averse, and value financial control, according to the study.
Following that study, we did deeper research in order to know the kind of model people really desire, one that brings about their current behaviour and removes the lack of trust in transactions. That journey has led to Plan Now, Buy Later (PNBL), a model that transforms the culture of savings in Africa into a system of transparent, sustainable consumer finance that is modernised and technology-driven.
Why PNBL Fits Africa Better Than BNPL
We understand that credit-intensive models such as BNPL do not work in African settings. They have been imported from economies where the income is predictable and where the consumer credit system is well developed, but in Africa, they may bring new problems to businesses and customers. Repayment-based systems are hard to maintain due to the high default rates, fluctuations in inflation, and cultural debt aversion.
PNBL offers an alternative, not as a rejection of innovation but as a locally grounded evolution of it. It is formed based on already existing behaviours. The buyers save, purchases are only made when the target is achieved, and they have the money safely kept in regulated escrow accounts until delivery is made. The structure minimizes risks of default, facilitates consumer control, and ensures trust between buyers and sellers.
Our findings suggest that PNBL may work because it reflects what consumers are already doing. As the Afritail research revealed, over 80% of surveyed buyers prefer saving and paying upfront rather than owing anyone. PNBL formalises this discipline, transforming informal savings into structured purchasing power.
The biggest risk in the African markets is inflation, which is handled by a tolerance band of up to 5%. Prices are fixed at the beginning of the savings process, and when inflation goes beyond the threshold, the burden is evenly distributed between buyers and sellers. This removes the burden of market volatility on any side, thus establishing a stable market on both hands.
Taking escrow technology, verified merchants, and goal-oriented saving, PNBL develops a form of modern framework, which is based on the ancient rule plan first, then buy.
Practical Use Cases of PNBL Across Africa
The PNBL model is already familiar in practice; it simply modernises what Africans have done for generations.
Take the case of aso-ebi contributions for Nigerian weddings. Traditionally, friends and family contribute informally to purchase matching fabrics, often leading to disputes or mismanagement. With PNBL, contributors deposit their shares (say ₦150,000, about $101 at ₦1,486.68 per USD) into an escrow account managed by regulated savings platforms. Funds are released only when the target is reached and delivery is verified, ensuring accountability, transparency, and fairness.
The same logic applies across sectors. In Kenya, parents can save gradually towards school fees at verified schools and colleges, whereas stokvels can collaborate with escrow services in South Africa to assist their members in purchasing long-lasting items such as appliances or farming equipment. PNBL can help the entrepreneurs and small business owners on the continent to plan the acquisition of the necessary assets, whether sewing machines or POS terminals, and have their savings directly proportional to productive results.
PNBL makes the uncertainty predictable and trust-based transactions through the formalisation of these culturally familiar practices.
How PNBL Works in Practice
The architecture of PNBL is based on trust and structure. Buyers would put money in a neutral escrow account that is operated by licensed digital savings platforms, and they are bound to save up to a specific objective. These custodians are regulated and supported by trustees and, therefore, are good associates in safe transactions.
Every savings plan is linked to one of the trusted merchants and a particular product. The money is discharged on delivery confirmation, through logistics dispatch, OTP, or electronic signatures. A tolerance system of inflation is flexible enough to make small changes to safeguard both parties against market fluctuations.
Unless buyers decide to quit at any point during the process, there is flexibility in terms of refunds, store credits, or donations. In the meantime, the sellers may have financing partners to provide early liquidity to them when they mention they have reached 70-80%of their target savings. This system sustains cash flow while maintaining the savings discipline central to PNBL.
Mapping the Market Opportunity
PNBL opportunity is quite important and not explored extensively. In Sub-Saharan Africa, there are over 350 million adults who are unbanked and an additional 200 million underbanked, most of them already engaging in informal savings. This is one of the untapped markets of savings-based consumer finance.
Take Nigeria as an example. Even a modest 10% adoption of PNBL for average transactions of ₦150,000 ($101) would result in approximately $1 billion in yearly escrow savings, given that there are over 100 million people. That amounts to $20 million in potential yearly platform revenue at a 2% service fee. With 400 million participants, PNBL has the potential to open up a multibillion-dollar market that credit-based models ignore.
Current fintech investments focus heavily on BNPL and microcredit, which serve roughly 10–15% of the urban middle class. The remaining 70% of consumers, who already save to spend, are excluded. PNBL gives this majority a structured, safe, and transparent channel to do what they already do informally.
Why Investors Should Care
Our insights show that PNBL is not just a financial innovation; it is a behavioural one. It provides investors and industry players with a culturally based, scalable, and low-risk entry to the largest consumer base in Africa. Its savings-led nature, as opposed to credit-based, also reduces the risk of default and reflects the regulatory priorities of inclusion and consumer protection.
The success of PNBL, however, is subject to sound digital infrastructure, integration of merchants, and long-term consumer education. Without these, adoption could lag or become fragmented.
The potential impact is substantial if it is executed well. Even though just 5% of working-age Africans use PNBL for necessities, with an average purchase cost of $101, this amounts to $2 billion in savings annually and about $40 million in revenue for escrow facilitators. These figures treble with 20% adoption, establishing PNBL as a transformative but sustainable force in Africa’s financial evolution.
Key Actions for Africa’s Consumer Finance Ecosystem
For PNBL to thrive, collaboration is key. Each stakeholder has a crucial role to play in ensuring a saving led financial culture that strengthens trust and inclusion across Africa.
- Businesses and Brands: Redesign pricing and sales strategies around savings-led behaviour, offering customers prepayment options that reward commitment and trust.
- Buyers: Use regulated savings–escrow systems to plan big purchases safely while avoiding debt.
- Sellers and Merchants: Partner with escrow-backed fintechs to secure guaranteed payments, reduce disputes, and strengthen customer confidence.
- Fintech Companies: Integrate PNBL features into existing savings platforms, expanding their utility from personal finance into commerce.
- Policymakers and Regulators: Recognise PNBL as a legitimate pathway to financial inclusion—formalising informal savings and enhancing consumer protection frameworks.
Africa’s markets don’t lack innovation; they need innovation that understands them. PNBL represents the next step in that journey, a model that combines traditional financial discipline with modern technology to help Africans plan, save, and make sustainable purchases.
Authors:
Mahmood Abdullahi Loke, Director, Accel360 Hub
Prof. Uchenna Uzo, Faculty and Academic Director, Africa Retail Academy, Lagos Business School
Dr. Richmond Okafor, Senior Fellow, Lagos Business School
