Consumers in Nigeria would rather save for unexpected events than pay off debts

Financial institutions in Nigeria should consider coming up with affordable packages that will ensure that even the low-income earners are able to save for emergencies.

Ideally, what does financial freedom mean to Nigerian consumers? A poll conducted by Kasi Insight in March 2022 identified that majority of the consumers surveyed (44%) believe that financial freedom is being on track to meet financial goals like buying a house or starting a business. They are followed by those who believe that financial freedom is all about being flexible to make lifestyle choices like working less or taking vacations (28%). Only 20% of the consumers surveyed believe that financial freedom is feeling in control about their day-to-day expenses like paying bills, rent and food.

Further, the poll revealed that majority of the Nigerian consumers surveyed are looking to achieve financial freedom. 72% want to achieve financial freedom, 5% are unsure while only 23% are not looking forward to achieving financial freedom. Interestingly, Gen Zers are leading when it comes to their willingness to achieve financial freedom. 92% of Gen Zers want to achieve financial freedom, 79% Baby Boomers, 70% Millennials and 67% Gen Xers.

Majority of consumers surveyed are swimming in debt but want to keep savings

When it comes to whether consumers in Nigeria are able to clear their business, personal and credit card loans, majority of those surveyed (53%) are struggling to pay off their debts while 47% are not. There is a 4% gap between the segments (Males - 54% and females - 50%) indicating that males are struggling to pay off their debts slightly more than females.

Across consumer segments struggling with debt, the older generation is finding it harder compared to the younger ones which is clearly demonstrated by the findings where Baby Boomers are at 58%, Gen Xers at 55%, Millennials 51% and Gen Zers at 40%.

The majority of consumers surveyed (74%) agreed that they have enough savings to cover unexpected events while only 26% did not. Gen Zers are the least prepared for unexpected emergencies at 42% in comparison to Gen Xers 84%, Baby Boomers 75%, Millennials at 72% who have adequate savings to cover such scenarios. Across income levels, the high-income earners are the most prepared to deal with emergencies at 70% while low-income earners are the least prepared to deal with such issues (40%).

Financial institutions in the country, should pay keen attention to consumers’ loan eligibility criteria. For example, though older people may be considered credible to take up loans, they would take these loans and struggle to pay back. In order to guarantee that loans are not defaulted, young people should be allowed to take up loans with strict repayment policies. Additionally, these institutions should consider coming up with affordable packages that will ensure that even the low-income earners are able to save for emergencies.

Nigerian financial institutions need to pay key attention to Gen Zers in order to make more sales

Nigerians want to achieve financial freedom regardless of their financial situation. banks should provide services/products that help consumers save and budget their money so as to attain financial freedom.
Nigerian banks could win big if they focus on Gen Zers. Interestingly, Gen Zers are leading in their willingness to achieve financial freedom. Being the newest faction of workers and also the youngest; Gen Zers though uncertain on how they will be able to meet their expenses, they still want to achieve financial freedom.
Nigerians have embraced a saving culture. Regardless of whether they can meet their daily expenses, respondents are willing to save for the future. This may be attributed to the effects of the pandemic that derailed financial position of the respondents. With this in mind, banks should come up with products that enable customers save as little as they can for future use. This will highly favor Gen Zers and low-income earners.

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