Providing financial services to consumers at the base of the pyramid in Nigeria

Abstract

This study assesses challenges of financial service providers, specifically banks, microfinance institutions, long term insurers and short term insurers, at the base of the pyramid with respect to affordability, acceptability, availability and awareness in Nigeria. This was done through a questionnaire posed to base of the pyramid consumers in Nigeria. Loyalty to financial service providers was examined to determine what the drivers of loyalty are in the base of the pyramid market. These drivers differ per financial service and need to be viewed separately by each of the industries within the financial services sector. It was found that most base of the pyramid consumers do not participate in financial services due to acceptability, showing that the products and services provided by these institutions are not meeting the needs of the base of the pyramid consumers. Affordability also plays a role in base of the pyramid consumers not taking out financial services products. This indicates that financial services providers need to come up with new products and services with appropriate pricing models in order to service this market. Other factors, such as trust, also play a role in the financial services sector in base of the pyramid consumers in Nigeria.