Startup of the Week: New Saudi app to formalize citizens’ saving groups

Startup of the Week: New Saudi app to formalize citizens’ saving groups
Startup of the Week: New Saudi app to formalize citizens’ saving groups

Thank you for reading the news about Startup of the Week: New Saudi app to formalize citizens’ saving groups and now with the details

Jeddah - Yasmine El Tohamy - JEDDAH: A rotating savings and credit association (ROSCA) is a financial management and saving tool that is popular in Saudi society and usually operated among friends and family. However, ROSCAs can fail due to their randomness, poor management and lack of commitment.

A ROSCA consists of a group of individuals, usually acting as an informal financial institution in the form of an alternative financial vehicle, which functions via set contributions and withdrawals among its members.

Circlys is a Saudi mobile app that aims to reduce the risk of failure by helping users to easily manage their ROSCAs and to join public ones while ensuring authenticity to prevent fraud.

Circlys gives users the opportunity to take these “saving circles” (ROSCAs) to a more formal level. “Our circles’ plans are no different than what people are used to. The only new thing is that you join the circle with strangers; however, they are qualified, and we ensure their ability to be part of the service,” Khaled Hassoun, co-founder and CEO of Circlys, told Arab News.

Hassoun said that the app’s role was to group people together in public saving circles in a more flexible and protected platform while maintaining customers’ confidentiality and privacy.

“Each member is asked to sign promissory notes to insure their payments, these notes could lead someone to a lawsuit if they drop off paying on other members in the circle,” Hassoun said.

Members go through an approval process using multiple tools, including the national single sign-on (SSO) system, to make sure that each user can join the circle and that they will not default. “In the case of any defaults, we compensate the loss immediately from our capital, and then we proceed with legal action against the member in question,” Hassoun said.

The app opens public circles on a monthly basis for new members to make their reservations based on their needs. There are two types of circles — six months long and ten months long — and a variety of shares ranging from SR500 ($133) to SR3,000 a month.

Members are required to pay subscription fees, which vary according to factors including the amount of money to be received and the month chosen on the rota. 

The two-year-old company began opening its public circles to consumers in March 2019. Since then, Circlys has had more than 8,000 different circles and hosted more than 40,000 active users — 98 percent of consumers live in Saudi Arabia.

Hassoun said that their biggest goal for the coming years is to stimulate saving in society.

“We want to play a role to achieve the Saudi Vision 2030 goal to increase household savings from 6 percent to 10 percent of total household income,” he said.

Users can also create, manage, and track their own private circles on the app with people they know; members can be easily added from the user’s contacts list.

Based in Riyadh, the company has gone through two successful crowdfunding rounds. The biggest one was in September this year, during which the company received SR1.5 million and attracted more than 300 investors.

“We got all kinds of funders from a few thousand riyals to over SR150,000; the amount we needed, which is SR1.5 million, was complete within 26 hours. It is worth 10.36 percent of the company,” Hassoun said.

These were the details of the news Startup of the Week: New Saudi app to formalize citizens’ saving groups for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at Arab News and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV Saudi Cabinet calls for talks over Ethiopian dam
NEXT Saudi school smashes world record for longest chain of bottle caps