Whether it’s ajo, esusu or the local community contribution groups, Nigerians have always found ways to save money with friends.
Some of these groups may work just fine for a bit. But deep down, we all know they can also come with plenty wahala. One person can collect everybody’s contribution and suddenly disappear, or the collector uses your money to play Sporty or buy Valentine gifts for their crush. And when things go south like this, it can be difficult to know how to get your money back.
To avoid stories that touch, there are laws and government-backed schemes that give you more formal ways to save money together with your friends, manage funds, invest together, or even build property as a group.
We have compiled five of them for you.
Under Lagos State’s Cooperative Societies Law, a group of at least 20 friends can register a cooperative society to pool savings and access financing that is often cheaper than commercial bank loans. Basically: turn your “squad savings” WhatsApp group into a registered entity that can actually sue and be sued (hopefully never by each other).
Instead of running your joint hustle as an informal “we’ll split it later” arrangement, the Companies and Allied Matters Act (CAMA) 2020 lets two or more friends formally register a Limited Liability Partnership (LLP) with the Corporate Affairs Commission (CAC).
This structure ensures that the business is a separate legal entity, protecting everyone’s personal assets if things go sideways. Nothing tests a friendship faster than money, so write the agreement down before anyone starts saying, “I thought we agreed…”
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Securities and Exchange Commission (SEC) rules on Collective Investment Schemes (CIS) allow groups to invest through regulated unit trusts and mutual funds, with a fund manager handling the day-to-day operations. So instead of handing your money to that one friend who “knows crypto,” your friend group can invest together through SEC-regulated mutual funds or unit trusts managed by licensed professionals, protecting you and your friends from unnecessary risk with strict regulatory transparency to prevent unnecessary ṣhàlàyé.
Under the SEC’s Crowdfunding Rules (2021), your friend group’s business idea can raise money from a larger pool of small investors through a registered portal, because your friend’s rich uncle shouldn’t be the only funding strategy. However, to use this, your business must be formally recognised as a Micro, Small, and Medium Enterprise (MSME) and typically possess a two-year operating track record.
Register as a cooperative (and make sure every member actively contributes to the National Housing Fund for at least 6 months), and you and your besties may qualify for the Federal Mortgage Bank’s Cooperative Housing Development Loan, which can help finance massive housing development plans, provided your squad already owns the land with a clean title before individual members transition into mortgages. In simple terms, your cooperative handles the land and construction financing as a group, then each member gets an individual mortgage to own their unit. Yes, you and your friends really can build an estate together, no billionaire required.
We know money has a funny way of testing even the strongest friendships. So before you start pooling millions with your besties, agree on the rules, put them in writing, and make sure everyone knows exactly what they’re signing up for. Your friendship will thank you later.
And if you’re looking for more ways to understand your money and the systems that help you build and protect your wealth, the Naira Life Conference is where you want to be, because knowing what options are available is often the first step to making better decisions with your money.
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