The low income mass market segment can and are willing to save. EFInA recently undertook a qualitative study to understand the savings habits of the low income population, their perceptions of formal financial services providers and the potential for using mobile phones to manage their finances. To present the findings of the study, EFInA hosted an Innovation Forum themed ‘Promoting Financial Inclusion through Effective Savings Mobilization’.
Speaking at the event, Modupe Ladipo, Chief Executive Officer, EFInA said; “The EFInA Access to Financial Services in Nigeria 2010 survey highlighted that 23.8 million adults are currently saving at home which has a negative impact on the country’s economic growth and development. If we can get 50% of these people to save N1,000 per month, then potentially N143bn could be mobilised per annum”. She also stated that ‘the understanding the low income population in Nigeria’ study highlighted that there is demand for a range of affordable, convenient and accessible formal savings products for low value savers. The design and implementation of such products is critical to the successful in mobilization of savings deposits.
A panellist at the forum Yinka Blackshear, Managing Partner, Bridgeway Consulting, stated “The need for formal savings options is crucial; without them the poor especially women are forced to keep cash at home or in informal savings groups which are risky and money can be lost. As women tend to be the savers in most low income households, a well-designed savings product can have significant empowerment benefits for women”.
Yewande Adewusi, Programme Manager, EFInA stated “To motivate customers to save in a bank or any other formal financial institution product managers should identify the financial needs of low income customers and then create products to fit those needs”. She also suggested that providers need to explore developing products and services that mimic those offered by informal savings groups such as the ‘esusu’ or ‘ajo’ and distribute them through non-bank branch channels. These products should serve as an entry point to access other financial products.
At the Forum, EFInA announced its third call for proposals for the Innovation Grant. Round 3 focuses on supporting new ideas and approaches to expanding access to ‘formal savings’ products and services designed for the unbanked and under-banked population in Nigeria, especially women.