Updated: Dec 11, 2021
For 51% of respondents, achieving financial freedom means being on track to meet their financial goals such as buying a home and/or starting a business.
In 2018, Nigerians saw ownership as a sign of financial freedom
Unfortunately, banks were not helping them achieve it
Can fintech companies show up where banks have been missing in action?
Financial freedom for Nigerians is about ownership
Financial freedom means having enough savings, financial investments, and cash on hand to afford the kind of life that we desire for ourselves and our families. For individuals across the world, the definition of financial freedom can differ, depending on the economic, social, and political situation of the country in which they reside.
A poll conducted by Kasi in 2018 on the meaning of financial freedom for Africans has revealed that for Nigerians, financial freedom is predominantly centered around ownership. For 51% of respondents, achieving financial freedom means being on track to meet their financial goals such as buying a home and/or starting a business. Following that, 45% believe that having the capacity to absorb financial shocks such as a job loss or accident is a means of gearing up towards financial freedom.
Banks can do more to help consumers reach the promised land
Banks are critical players in gearing individuals towards their means of financial freedom. An individual's ability in building credit and clearing debt can be supported significantly with the help of banking institutions and can pave the way towards achieving ownership opportunities such as those that Nigerians strive for.
Our survey presents some surprising findings that may indicate a disconnect between the banking institutions' means of financial freedom as compared to those of the Nigerians. More than half of the respondents, 52% to be exact, are struggling to pay off debt such as personal loans, business loans, or credit cards. This is significant as such debts hold burdens over individuals preventing them from growing their savings and instead of directing them towards debt repayments.
Additionally, 56% of respondents do not think that their banks are equipping them with the tools they need to be financially stable. This demonstrates that banking institutions in Nigeria are not in tune with the goals of the people when it comes to financial freedom. This finding partly explains the rise of Fintechs in Nigeria.
Can Fintech companies show up where Banks are not?
The recent investments in fintech in Nigeria have presented a way of solving this challenge. Fintechs have taken advantage of this opportunity to present enhanced propositions across the value chain that address major pain points for customers. The fintech play has been centered around the significant number of the country’s population remaining unbanked or without a formal financial service. Fintechs are launching offerings that are more convenient, relevant, and accessible for all. While they may be solving the access challenge, they are still lagging when it comes to solving the financial freedom challenge, helping people access to home or business ownership.
The good news is more fintech companies are getting funding thus meeting the goals of many individuals whose path to financial freedom comes with the start of their own businesses. Furthermore, fintech companies are encouraging Nigerians to invest in savings and investment products.
Fintechs in Nigeria could pave the way for greater financial freedom amongst the population. It is critical to avoid the same mistakes banks have done, becoming too complacent in meeting the needs of the African consumers. It is vital to understand the goals and aspirations of your customers in order to find attractive solutions. In the financial industry, understanding your customers' attitudes and perceptions of banks and how they personally manage their savings and debts towards achieving their desired goals in life can be extremely insightful in your steps to surpass the pain points.
Most importantly how did Covid-19 change consumer behaviors and aspirations when it comes to financial freedom? Kasi Insight can provide you with such data and insights, which you need to determine if your business is right for Nigeria or anywhere else in Africa.
Contact us to see how we can help your business today.