By Giwa SHILE
Broader community engagement, religious institutions and informal social groups are essential to driving financial inclusion in Nigeria, Lagos Business School (LBS) study shows.
The Academic Director and Senior Fellow at LBS, Dr Olayinka David-West, made the disclosure at the launch of the first Customer Segmentation Study in Lagos.
David-West said this was one of the key findings of the study executed by LBS.
Wikipaedia, the free encyclopedia says, “Financial inclusion is where individuals and businesses have access to useful and affordable financial products and services that meet their needs.
“Financial inclusion is defined as the availability and equality of opportunities to access financial services,’’
TBI Africa reports that the research report was launched in partnership with Dalberg and the Bill and Melinda Gates Foundation.
According to him, the study also identified the need for unconventional approaches to on-boarding financially, which excluded the use of livestock ownership as collateral for financing, among others.
David-West, in a new report by the Sustainable and Inclusive Digital Financial Services initiative (SIDFS) of the school, launched alongside an art exhibition, said that six customer segments of financially excluded persons were identified.
He said SIDFS would continue to carry out research to aid in driving financial inclusion as a key indicator for meeting the Sustainable Development Goals (SDGs).
“These are Vulnerable Believers, which form 12 per cent of the population and Resilient Savers, which form 21 per cent of the population.
“Others are: Dependent Individualists, 22 per cent; Digital Youth, 19 per cent; Confident Optimists, 14 per cent and Skeptical Cultivators which form 12 per cent.
“One of the many challenges of Financial Service Providers (FSPs) was limited knowledge of customers.
“As a result, they often overlook high potential customers or misidentify their needs, and invest in products and channels that sometimes miss the mark.
“The customer segments presented in this study provide insights into the behavioural and attitudinal traits of the Bottom of the Pyramid (BoP) population.
“Currently estimated at 75 per cent of Nigeria’s population (about 135 million people), with a view to providing FSPs with correct information to create fit-for-use and segment-aligned digital financial products,” he said.
Speaking, Nneka Eze, the Partner and Nigeria Director, Dalberg, said as part of the company’s work to define a novel global applicable approach to segmentation, research was conducted in six countries across Africa and Asia.
“Among the countries, the Nigeria report introduces a novel approach to segmentation that integrates contextual, behavioural and psychometric variables that is useful in identifying patterns.
“It highlights nuances and differences between people that may not be clear from their contexts alone, overlaying segmentation, using behavioural and psychometric approaches with FSPs’ existing segmentation strategies.
“We identified opportunities to drive market share-reaching people that a broad demographic approach to the market may not reach or energise,” Eze said.
He said the research study was the most representative of Nigerians with a sample size of 1,200 across the country.
He said the study integrated three variable types into its segmentation approach to expand information about BoP consumers and strengthening typical approaches to segmentation.
