71point4 piloted an innovative research method that combined both traditional demand-side research instruments, in the form of face-to-face surveys, with transactions data generated by the Nigeria Inter-Bank Settlement System (NIBSS). The project tried to better understand the digital financial services landscape, how it currently serves the people of Nigeria and how it can be improved to better serve their financial needs.

NIBSS is Nigeria’s largest inter-bank switch. The transactions data generated by NIBSS can be analysed at a unique customer level identifier using the Banking Verification Number (BVN). Because NIBSS processes several billion transactions for over 36.5 million BVNs each year (and counting), the analysis was conducted on a randomly drawn sample of one million BVN’s. For each of these BVN’s a full transaction history ending in December 2017 was extracted, covering various inter-bank payments and platforms supported by NIBSS.

In addition to transactions data, the project team analysed demand side survey data collected by i2i during November and December 2018. A sample of over 2,000 adults aged 18 or more were interviewed in urban centres in Lagos and Kano states. Along with various demographic and contextual indicators, the survey explored payment use cases, to assess adoption of digital payment solutions. A further 611 respondents were selected from the NIBSS sample. For these respondents, a merged dataset was created that include both survey data and actual payments data generated by NIBSS.

In line with other data, the demand-side survey found relatively low adoption of digital solutions for either receiving income or making payments. Unsurprisingly, formal salaries and government-to-person payments are mostly digitised. While there is some scope to digitise these payments further, to drive digital adoption meaningfully across the Nigerian economy, other income streams will need to be digitised – notably small business owners and other merchants. Exhibit 1 illustrates the income sources in Lagos that are priorities for digitisation.