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Universal financial access is closer than ever before, but what about usage?


Paying with credit card terminal

After financial access, what comes next?

In 2011, 43 percent of the world’s adults lacked access to formal financial services, according to the Global Findex report. By 2017, that number reduced to 31 percent. If current projections remain consistent, we should be celebrating universal financial access by 2025.

While this is encouraging and worth celebrating, another problem has surfaced — a surge in dormant bank accounts. That is, people are opening bank accounts but they are not using them. CEO, Consultative Group to Assist the Poor (CGAP), Greta Bull estimates that about 49 percent of all bank accounts are inactive. That is incredibly high.

To begin to reap the dividends of financial inclusion, those with financial access have to utilise these facilities often. Financial access can only lead to improved financial health when consumers use the tools, services, and facilities provided by formal financial institutions to plan and manage their financial lives.

Thus, it is a priority for us in the financial inclusion community to stimulate the usage of formal financial services and give consumers reasons to keep utilising them.

Research has revealed that there are issues affecting the continual usage of financial accounts. In this article, we discuss one of those issues.

[In]appropriateness of financial products and services
The slow rate of adoption of formal financial services as well as the decline in financial inclusion in recent years has spurred discussions on the lack of appropriate products and services on offer by financial services providers.

This stems from the dearth of accurate insights into customers’ lifestyles, aspirations, and habits, thereby preventing providers from tailoring their products to meet these needs.

The Nigeria Customer Segmentation Framework (CSF), a new report launched by Lagos Business School’s Sustainable and Inclusive Digital Financial Services (SIDFS) in August 2018, tries to address this gap within the ecosystem. A major takeaway from the CSF report is that homogeneity does not exist within the Nigerian market.

With over 90 million (bankable) adults, the market is diverse enough to bring to the fore different customer segments and their peculiar features including their fears and aspirations, the communities in which they reside and earn their livelihood, their overall financial health as well as obstacles to financial access and usage.

The CSF report identifies six customer personas. While these six are in no way exhaustive, they serve as a catalyst for innovation and fresh paradigms in serving financial service customers. They are:

Vulnerable Believers
This category includes lower-middle-class to poor Nigerians who are religious, predominantly rural, and with limited education. They use financial services infrequently and struggle to pay their bills. They have the lowest aspirations for the future.

Resilient Savers
These are primarily men, across all socio-economic groups, who are responsible for household financial decisions. Frequent savers through friends, family, and groups; they use their savings to manage emergencies.

Dependent Individualists
They are mostly female, belong to the lower-middle-class and with the second lowest level of education of all segments. The least impulsive segment, they rely on others to make financial decisions and for support during emergencies, yet have lower than average trust in banks and social networks.

Digital Youth
These are young, well educated, urban, and frequent users of digital technology. They are the wealthiest segment but have high-income volatility. They are most likely to perceive their community as unequal and believe they can trust their community but not rely on the community to invest in their business.

Confident Optimists
These individuals belong to the middle to upper class. They are young, well educated, and urban, with high self-esteem and a positive view of the past and future. They are the most deliberate and open segment, with strong trust and belief in their community, and the largest users of mobile money.

Skeptical Cultivators
They are lower-middle-class, rural, and older than average. They distrust banks and their broader community and are most likely to trust only those they have had a long relationship with. They have the lowest self-esteem and they struggle with planning but excel at savings.

The CSF report explores each persona in more detail, with eye-opening statistics and narratives explaining each segment’s habits, aspirations and pain points.

As a framework, the CSF will enable providers to develop and deploy more market-centric products and services. This involves not only designing “bullseye” products, but providers will be able to explore alternate on-boarding and delivery mechanisms for their services.

This deeper knowledge will also enhance above-the-line (ATL) and below-the-line (BTL) marketing and communications efforts, reducing the possibility that such messaging “misses the mark”. More so, these detailed insights can enhance development actors and policymakers in their selection of beneficiaries for programme interventions and decision making.

Have you read the Nigerian Customer Segmentation Framework? You can download it here and tell us what you think at or Twitter: @sustainabledfs

Dr Olayinka David-West and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative at Lagos Business School

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