BY: Victoria Heath
Late last winter, sheltered in the historic halls of the University of Toronto, four students plotted to start a global financial revolution. Inspired by the 2015 UofT Hult Prize Challenge—which they subsequently won—the group, now officially known as Vicis, sought to address financial exclusion, one of the most complex and lingering international issues, with their product NIMO.
Vicis believes NIMO will not only help end the cycle of poverty, but also completely “disrupt the socio-economic pyramid.”
Financial exclusion affects an estimated 2.5 billion adults worldwide, many living below $2 per day. According to the World Bank, “the richest 20% of adults in developing countries are more than twice as likely to have a formal account as the poorest 20%.” Without access to banking and more importantly, savings accounts, many people are not able to save for their future or invest their money – perpetuating the cycle of poverty.
To fill the gap, financially excluded people will sometimes join what’s known as informal savings circles, where groups of people place a pre-determined dollar amount in a communal savings pot. Each person then has access to this money on a rotating basis for emergencies or to pay bills. It’s completely informal and entirely community-based.
Confused? Here’s an illustration:
The NIMO Difference.
NIMO, a mobile-based application, aims to tap into the estimated 160 million informal savings groups that exist today.
Now, let’s return to Delilah’s savings group. If her group uses NIMO, they not only secure their money transfers by using their cell-phones, eliminating the need to handle cash, but they also receive a digital record of their financial history, which allows them to build their personal credit, and eventually, access formal banking systems.
The revolutionary aspect of this application, however, is its investment scheme. Delilah’s group can actually grow their community by choosing to invest some of their savings into the community through NIMO. At the end of each cycle, Delilah’s group would then receive their investment back, plus interest. Instead of just filling the savings pot each month and then emptying it, this application promotes individual and community growth through investment. That’s The NIMO Difference.
During an interview, Christopher Villegas-Cho, one of the team members behind NIMO, put it this way: “Poverty might be experienced on an individual level, but it requires community-wide interventions.” Cho mentioned that there are other digital savings platforms out there (like Susu), but NIMO takes it a step further “by not just turning these savings groups into savers, but investors too.”
The revolution started by students.
David St. Bernard, Adam Day, Christopher Villegas-Cho and Tricia Jose are not your typical students, wasting their Saturday’s binging on Game of Thrones. These keeners have expertise ranging from business, law, bio-medical engineering and economic development, as well as experience working in Latin America, Africa, Asia and Europe. They really do want to revolutionize the world, and they want other students to be inspired to do the same.
Cho enthusiastically encouraged other students to get involved in side projects and participate in competitions, like the Hult Prize. He believes it’s not something to take lightly however, “experiences like the Hult Prize only give back as much as you put in though, so if you’re going to get involved in a project, commit to it and go the extra mile. You never know when a passion can turn into something more.”
So what’s the next for NIMO?
Of course, winning the UofT Hult Prize Challenge wasn’t enough for Vicis. Cho laid out the team’s next steps over email:
“Over the next couple months, we’re going to build our partnerships and develop a prototype. We’re working in collaboration with the World Bank, coins, BEAR and incubating at DCSIL to work on getting a pilot of the ground potentially in Manila and other locations. The amazing thing about this solution is it wouldn’t just be effective in emerging markets, such as the Philippines, but could also have a significant impact in developed markets like Canada, as an alternative savings and retirement mechanism.”
This financial revolution could be coming to a phone near you.