71point4 > Projects > Financial inclusion > Advancing financial inclusion – Nigeria pilot study

Advancing financial inclusion – Nigeria pilot study

71point4 worked with insight2impact (i2i) to pilot 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).

NIBSS is Nigeria’s largest inter-bank switch. The transactions data generated by NIBSS can be analysed at a customer level using the Banking Verification Number (BVN). The BVN is a unique customer identifier which is reported together with bank account details for every transaction processed by NIBSS.

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. Aside from transactions data, some demographic data is gathered during the BVN registration process, including age, gender, contact details and location at the time of BVN registration.

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 in particular, 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.

A key finding - digital receipts

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.

Exhibit 1

A more comprehensive overview of this analysis can be viewed here.