1. THE RISE AND RISE OF
DIGITAL LENDING
5th Annual Africa Banking & Finance Conference
Nairobi, Kenya
19 MAY 2015
2. PRESENTATION AT A GLANCE
1. Introduction to the Financial Inclusion Insights
Program
2. Bank customer segmentation, journey,
demographics and financial behavior.(Nigeria &
Kenya)
3. Challenges & Opportunities for Banking sector.
4. FII – COUNTRIES AND CONTENT
A combined 2 billion-plus population representing a mix
of more-advanced and early-stage DFS markets
A combined 2 billion-plus population representing a mix
of more-advanced and early-stage DFS markets
Annual, nationally representative surveys
of adults in 8 countries (n = 3,000 to
45,000), which…
Track access to and demand for
financial services generally, and the
uptake and use of DFS specifically;
Measure adoption and use of DFS
among key target groups (females,
BOP, rural, unbanked, etc.);
Identify drivers and barriers to
further adoption of DFS;
Evaluate the agent experience and
the performance of mobile money
agents; and
Produce actionable, forward-
looking insights to support product
and service development and delivery,
based on rigorous FII data.
5. HOW DOES FII’S DEMAND-SIDE RESEARCH ASSISTS IN
PROMOTING THE EXPNSION OF DFS?
By providing knowledge and insights on:
• Client pain points in the current methods of transaction to help identify
potential for introducing new/modified products and services
• Triggers and barriers to uptake and usage of services including quality of
service, accessibility, cost, trust, awareness, education, and lack of
financial literacy to inform providers’ strategy for promoting their
services/products and engaging with existing and potential clients
• Transactions/financial activities that would benefit from digitalization to
advise providers and donors on priority areas for digitalization
• Potential for digitizing payment streams in industry value chains -- for
example garment industry, agriculture, government benefits – to advise
how to target decision-makers with the right message to enable identified
sectors adopt DFS
6. FII RESEARCH ELEMENTS: TRACKER SURVEY
Data collected
Core data:
Basic demographics
Poverty measurement (Grameen Progress out of Poverty
Index (PPI))
Access/use of mobile devices
Access/use of mobile money (MM)
Access/use of formal financial services (e.g., bank accounts)
Level of satisfaction with financial service providers and
products
Extended core data:
Trust in financial services
Use of “informal” financial services
Use of digital/prepaid cards
Use of savings instruments
Use of insurance instruments
Borrowing and lending habits
Additional data (selected countries):
Mobile money adoption influencers
Financial service interoperability
Technical issues in mobile money use
Perceptions/Opinions on consumer issues related to
interoperability
Perceptions of fraud in mobile money
Survey summary
• A national survey representative of all
adults aged 15+ living in the selected
country, conducted annually
• Sample sizes large enough to
facilitate demographic and geographic
analysis
• Face-to-face interviews lasting on
average 44 minutes
• Rigorous data quality control
procedures
• Collection of participants’ household
GPS coordinates
• FII Wave 1 provides baseline
measurements. Subsequent annual
surveys will measure trends and track
market developments in DFS
• Datasets posted on online query tool
and SPSS datasets available upon
request
• First and Second wave datasets
available
7. Data analysis at your fingertips http://finclusion.org/datacenter/
http://finclusion.org/datacenter/
FII ONLINE DATA CENTER
9. REGISTERED INACTIVE USERS
Have a bank account in their name and have not
used it for more than 90 days preceding the survey.
UNREGISTERED USERS
Use somebody else’s bank account to transact.
ACTIVE REGISTERED USERS
Have a bank account in their name and have used it
for at least one transaction in the last 90 days.
SUPER USERS
Have a bank account in their name and use the
account at least once a week to make at least one
beyond-basic-wallet transaction.
2%
7%
6%
15%
4%
6%
28%
9%
29% of Kenyans 43% of NigeriansAdults using banks
Source: InterMedia Kenya FII Tracker survey (N=2,995, 15+), September 2014. & InterMedia Nigeria FII Tracker survey (N=6,000, 15+) June-August 2014.
.
BANK CUSTOMER SEGMENTATION
10. 9%
38%
43%
50%
Super use
Regular use
(active registered
users)
Registration
Trial (ever used)
BANK CUSTOMER JOURNEY: FROM TRIAL TO SUPERUSE
7%
15%
28%
29%
Super use
Regular use (active
registered users)
Registration
Trial (ever used)
Source: InterMedia Kenya FII Tracker survey (N=2,995, 15+), September 2014. & InterMedia Nigeria FII Tracker survey (N=6,000, 15+) June-August 2014.
Nigeria bank users
(Shown: Bank users, n=3,141)
Kenya bank users
(Shown: Bank users, n=923)
0.9
0.9
0.2
0.6
0.5
1.0
0.18
0.24
21ppt
2ppt
11. Demographics
Profile of key bank account users
Unregist
ered
users
(n=52)
Registere
d inactive
users
(n=205)
Active
registere
d users
(n=461)
Super
users
(n=205)
% male 22 58 61 69
% female 78 42 39 31
% urban 41 45 52 59
% rural 59 55 48 41
% above
poverty
49 67 73 86
% below
poverty
51 33 27 14
Above poverty group are leading in usage of banks
Demographics
Profile of key bank account users
Unregist
ered
users
(n=356)
Registere
d inactive
users
(n=213)
Active
registere
d users
(n=1876)
Super
users
(n=611)
% male 29 49 57 65
% female 71 51 43 35
% urban 55 58 50 55
% rural 45 42 50 45
% above
poverty
3 9 12 14
% below
poverty
97 91 88 86
Super users and active bank account holders are mainly
poor, males whereas unregistered users are poor, females.
Kenya Nigeria
Source: InterMedia Kenya FII Tracker survey (N=2,995, 15+), September 2014. & InterMedia Nigeria FII Tracker survey (N=6,000, 15+) June-August 2014.
BANK CUSTOMER DEMOGRAPHIC CHARACTERISTICS
12. Demographics
Profile of key bank account users
Unregist
ered
users
(n=52)
Registere
d inactive
users
(n=205)
Active
registere
d users
(n=461)
Super
users
(n=205)
% have a job
(regular, self-
employed or
occasional
assignments)
61 75 82 89
% not working 49 25 18 11
% have an
account with
semi-formal
FIs
6 32 32 51
% have loans 22 31 29 38
% save 71 84 92 98
% have
emergency
fund
33 38 46 51
Saving is the leading activity with the banks.
Demographics
Profile of key bank account users
Unregist
ered
users
(n=356)
Registere
d inactive
users
(n=213)
Active
registere
d users
(n=1876)
Super
users
(n=611)
% have a job
(regular, self-
employed or
occasional
assignments)
50 68 70 70
% not working 50 32 30 30
% have an
account with
semi-formal
FIs
15 12 13 15
% have loans 11 12 10 9
% save 59 90 95 97
% have
emergency
fund
47 53 59 66
Majority of super users are employed & save
money.
Kenya Nigeria
Source: InterMedia Kenya FII Tracker survey (N=2,995, 15+), September 2014. & InterMedia Nigeria FII Tracker survey (N=6,000, 15+) June-August 2014.
BANK CUSTOMER FINANCIAL BEHAVIORS
13. CHALLENGES FOR DIGITALIZATION
• Poor Infrastructure
• High poverty levels
• Low education levels
• High rate of rurality
SIMILARITIES:
KENYA & NIGERIA
DIFFERENCES:
NIGERIA ONLY
• Poor Network
• Lack of MM awareness &
usage
15. Client pain points help identify potential for introducing new/modified
products and services
Downtime and
technical issues
are a big complain,
especially among
bank users in Nigeria
who face teller-system
and ATM outages.
Creating minimum
uptime standards
could
help improve
consumer trust in
providers and
increase
attractiveness of
banking services.
Network
downtime
Very high
mobile phone
ownership at
87% of adults
in Nigeria and
73% in Kenya
can be
leveraged to
offer
convenient
mobile
banking to
those in rural
and remote
areas
Mobile
ownership
9% of Kenyans
and 8% of
Nigerians receive
G2P payments.
Yet, only a small
fraction of them
use banks to such
activities.
Leveraging the
high level of trust
for banks and
G2P continuous
flow, banks can
develop attractive
G2P and P2G
products.
Bill pay
16. ABOUT INTERMEDIA
• We are an independent, global consultancy with expertise in research
and evaluation, particularly in low- and middle-income countries.
• InterMedia’s work supports strategic decision-making and program
assessment by a range of clients and partners, including: international
development agencies, philanthropic foundations, program
implementers, content providers, government departments and
commercial firms.
• InterMedia helps clients and partners understand the people and
businesses they intend to support or engage. Most of our work focuses
on producing practical “demand side” insights.
17. Thank you
For more information, visit www.finclusion.org
Lucy Kaaria, Research Associate, InterMedia Africa
kaarial@intermedia.org
Dr. Anastasia Mirzoyants-McKnight, Director of
Research and Operations, InterMedia Africa
mirzoyantsa@intermedia.org