Nigeria promoting financial inclusion through prize-linked promotions
Wednesday, January 8, 2014
Showy and appealing, prize-linked promotions (PLPs) are the modern version of ‘Million Adventure’, a savings programme launched in the UK in 1694. Anne Murphy in “Lotteries in the 1690s: Investment or Gamble?” described it as “an unprecedented large-scale financial saving tool”. Thomas Neale, who was in charge of the promo commenting on its success said: ‘many Thousands who only have small sums, and cannot now bring them into the Publick, [may now] engage themselves in this Fund’.
In a way PLPs in Nigeria reflect, or capture, the aspirations, saving and spending habits of Nigerians. Prize-linked promos are a veritable and untapped social lab for classical and behavioural economics. Prize-linked promos, by banks, telecoms operators, FMCG are immensely popular. They promise the consumer instant millions, gifts and cash prizes, say, brand new cars and wonders of wonders a plane. All consumers have to do is save more, drink more, eat more, talk more etc.
A close look underneath the numbers shows Nigeria’s domestic demand is resilient. According to the National Bureau of Statistics (NBS) Household consumption expenditure (HCE) at 61 percent is the largest component of Gross Domestic Product GDP (when measured by expenditure).