open-minded, tech savvy, planners
14% of population | 26 million | Nigeria: 185.9 million
Well educated and urban, Digital Youth
are the youngest and wealthiest segment, and the most likely to be single (63%).
They have confidence in their future and high self-esteem but are distrustful of banks—despite being the segment most likely to have a bank account.
Despite being the wealthiest segment,
Digital Youth are not financially healthier
than average Nigerians. They have the highest income volatility of all Nigerians,
due perhaps to their high rates of casual labor and self-employment.
They are technology enthusiasts, which is possibly linked to their high education and openness. Yet their ownership and use of mobile money accounts is only average for Nigerians, suggesting an untapped opportunity.
up to tertiary
up to secondary
have access to land
38% SES 5
23% SES 4
Who are they?
“Now that my family thinks I have money it is very difficult for me to approach them and ask for money. Even if I did they would just tell me they don’t have anything. They call me the rich man.”
TOSIN, EBUTTA META, NIGERIA
SOCIOECONOMIC STATUS (SES)
Relatively urban and highly educated, Digital Youth are the wealthiest segment. They are the youngest segment and the most likely to be self-employed and single, and are more often formally employed than the Nigerian average. This may account in part for their relative concentration in the top 2 socio-economic quintiles. However, they are also the most highly educated—25% have tertiary education—indicating that many may come from relatively wealthier families.
While Digital Youth are the wealthiest segment, their income is highly volatile: almost three-quarters not earning similar amounts week to week, and almost as many not able to predict daily earnings at the start of the day—both the highest across the segments.
Digital Youth are the most social segment in terms of daily phone calls, but rely on fewer people for support when sick. Potentially, their wealth allows them to handle health issues independently, or makes it more unlikely others will provide support.
What do they want?
Digital Youth aspire to save and invest to build businesses and a better future. They would allocate significantly more of a cash windfall to investments and bank savings.
In Nigeria, people often only save in banks when they have extra money for long term goals or investments that is not needed for short to medium term expenses (e.g. school fees, working capital, or repaying a loan).
How do they manage finances?
Despite their wealth and being the second-strongest planners, they are slightly less able than the average Nigerian to pay their household bills, likely due to their high income volatility.
The interplay between planning and volatility seems to affect their savings and borrowing behavior as well: they are the most likely segment to save monthly, the least likely to save weekly, yet are the second most likely never to borrow at all.
Digital youth’s uptake and usage of bank accounts are well above average, owing perhaps to their high socioeconomic status, high rates of self-employment and formal employment, education levels, conscientiousness and dependability—all of which correlate with higher rates of bank account usage. Digital Youth save in banks significantly more so than average Nigerians even though they distrust them, suggesting they feel that the benefits banks provide outweigh their distrust.
Despite their higher-than-average usage of technology, Digital Youth own and use mobile money accounts at the same rates as average Nigerians. Given the segment’s comfort with technology, high use of banks, confidence in the future, and strong self-esteem, there is a clear opportunity to drive mobile money use within this segment.
ACCESS TO PHONES
How do they think?
“I see people using ajos (ROSCAs) and when they get the money
I am impressed but I don't bother because I have a fixed account and
they are the same… [with] ajos someone could die or get robbed and
what can you do to recover your money?”
TOSIN, EBUTTA META, NIGERIA
Digital Youth take a nuanced approach to the ways in which they determine and shape their financial strategies. Although they do not trust banks, their high account ownership and usage suggests they recognize the value and utility that banks can offer given their circumstance.
TRUST IN PEOPLE
Though they are highly connected and strongly trust people, they have below average uptake and use of informal financial products. They may not see value in informal financial services given their unique financial needs (as entrepreneurs in the new economy), and in fact view informal channels as risky because because participation exposes their relative wealth to the community, which can then make claims against it. In fact, Digital Youth are the segment most likely to perceive their community as unequal, perhaps heightening the perceived risk, and in Nigeria this correlates with lower rates of informal service usage.
Moreover, they do not feel they can rely on the community to support their businesses, which given their relative youth and good health, may be one of their primary aspirations and financial needs. As such, they may see less value in informal services than the average Nigerian. In Nigeria low belief in community support correlates with low rates of borrowing overall and from informal groups, and high rates of using windfalls for investments, all behaviors demonstrated by Digital Youth.
BELIEF IN COMMUNITY SUPPORT
How might we develop and target products
that help Digital Youth lock away savings
despite their volatile incomes?
How might we develop and market smartphone
based financial tools to Digital Youth?
Create products and services that:
Offer and emphasize convenience of mobile
Smooth income and improve liquidity for
expenses, through financial planning, credit, and savings products for people with volatile income
Support business investment and management
Provide opportunity for financial privacy
Create outreach and messaging that:
Digital and social media
Schools and universities
Emphasize building a better future
Emphasize on unique experience and needs
“[To start a business] you need money and to think
very hard and plan what you will do. I’ve thought about starting a pedicure specialist place, one that doesn’t do manicures or anything else, but just pedicures.
There’s nothing like that in Lagos.”
Ayomi is a 21-year-old woman living with her aunt, uncle, and two cousins in a four bedroom flat in Orile, Lagos. She holds a high school degree, and works in retail at a local salon, but has big plans for the future towards which she is working and saving aggressively. She sees business as the foundation of her future financial security—“Before then [old age] I will have gotten something to lean on. That's why I say I want to learn my pedicure business and open a store.” While she earns a healthy monthly salary and she doesn't have to pay rent, Ayomi struggles to make ends meet, especially towards the end of the month. This is due in part to her support for her mom and her rigorous savings strategy.