Piggit: Pay off debts easily and playfully
Meet Sofia and Aida: Together with the rest of the founding team, they are developing the app Piggit, with which you can pay off your own mountain of debt in a playful and automated way.
When it comes to debt, Aida Chafik knows what she’s talking about. She herself pays a hefty chunk of money to her bank every month to pay off a mortgage loan. Of course, before taking out the loan, she thought carefully about whether she could afford it. But: “People underestimate the financial and psychological burden that debt represents on top of underestimating the effort it takes to alleviate this burden”, Aida says. That’s why she and her co-founders Sofia Bennis, Marion Gilles, and Mohammed Lahboub developed a painless saving app “Piggit” that automatises monthly extra debt repayments towards debt.
There are millions of Europeans facing the same struggles as Aida, whether they owe a student loan, a consumer loan, or a mortgage loan. Piggit aims to alleviate their debt burden through an automated and gamified solution.
The founders Aida and Sofia met more than 10 years ago when they attended a business school prep course together. “Even then, we realized that we were a very good fit for each other: we have a completely different yet very complementary skill set on top of (1) being both driven by an immense willingness to have a positive impact on people’s lives, (2) caring about the same values such as ambition, diversity, respect and appreciation.” Sofia says. “Back in 2010, I remember us sitting at the back row of our mathematics class brainstorming about entrepreneurial ideas instead of listening to the differential equations’ lesson”, Aida adds.
Piggit is not just about repaying debt faster, it is also about learning how to achieve financial freedom and living a secure life. According to the founders, internal calculations based on a report from the European Commission showed that 140 million people in Europe are in debt. Another study found in Frontiers of Psychology showed 23% of Europeans living in debt feel poor health, suffer from sleep problems and are stressed. Much is rooted in the mountain of debt. “Our desire is to take these people from the beginning, by hand, and show them smart, yet defensive financial strategies,” says Sofia.
The principle of Piggit is quickly explained. Users connect bank accounts to Piggit. Then, they choose the debt they want to tackle first — they can pay off consumer, car, student or mortgage loan. From there, they choose how they want to save — Piggit offers multiple options such as rounding up purchases, multiplying round-ups, scheduling withdrawals, deducting from salary, or playing a saving game. Once the 5-minute initial set up process is done, users access a sleek, free-of-intervention and secure app giving real-time access to expenses, savings, and extra-debt repayment. They just have to lay back and watch their debt fade away as all the money that was saved is sent at the end of the month to the account of the chosen loan.
The impactful thing about Piggit is that it does not only decrease the remaining length of the debt, it also reduces the amount of interest and insurance to be paid. Interests and insurance fees are charged as a percentage of the current outstanding balance. As you make extra payments and lower your balance, the amount you’re charged will go down, as well. While paying off loans early, Piggit also allows its users to pay less interests and insurance fees compared to if they follow their regular payment schedule. As Piggit reduces the amount owed one bit at a time, it also decreases interests and insurance fees.
“We are also trying to implement other fun ways in the app through which users save money,” explains Aida Chafik. “For example, a small amount is automatically transferred to the savings account when it rains outside. After all, people are less likely to go to cafes when it rains” Another idea occurred to her co-founder Sofia Bennis before Christmas: “Whenever Mariah Carey is on the radio, we could deduct a few cents from the checking account to the savings account.”
Ambitious savers could manage to save up to 500 euros per month with Piggit. Less ambitious savers manage to save 100 euros a month. Piggit will be available from mid-2022, initially in France and later in Belgium, the Netherlands, and Germany.
Follow Piggit’s journey on LinkedIn.