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EMAIL AND SMS MARKETING CAMPAIGNS FOR LOAN PRODUCTS: A STUDY OF KEYSTONE BANK IN ILORIN, KWARA STATE

CHAPTER ONE

INTRODUCTION

Abstract

This study investigates the efficacy of email and SMS marketing campaigns for promoting loan products at Keystone Bank Plc branches in Ilorin, Kwara State, Nigeria. A mixed-methods approach was employed, combining quantitative surveys administered to 380 customers with qualitative interviews conducted among 28 branch staff and marketing personnel, selected from a population of roughly 80,000 active account holders across Keystone Bank’s four branches in Ilorin metropolis. The analytical framework incorporated structural equation modeling (SEM) for survey data to examine relationships between campaign variables and loan uptake, alongside thematic analysis of interview responses. Results demonstrate that SMS campaigns generated 42% of loan inquiries and 35% of approvals between 2020 and 2024, with personalized offers exhibiting the highest conversion rate (48%). Email campaigns achieved superior awareness metrics (62% open rate) but lower action rates (22%). Integrated channel strategies contributed to a 31% increase in overall loan portfolio growth. Technical constraints including network reliability issues and spam perceptions diminished campaign effectiveness by 18%. Strategic recommendations propose hybrid SMS-email sequencing protocols, bilingual content localization (English/Hausa), adherence to NDPC regulatory standards, and predictive analytics implementation to enhance loan disbursement volumes by 25–35% within Kwara’s competitive financial services sector.

1.1 Background of the Study

Nigeria’s banking sector has increasingly relied on direct digital channels such as email and SMS for targeted product promotion, particularly loans, amid rising competition and the Central Bank of Nigeria’s push for financial inclusion (Okafor & Alabi, 2022; Adeyemi & Ogunleye, 2024). With mobile penetration at 85% and growing email usage among urban professionals, these campaigns offer cost-effective and measurable reach compared to traditional media (Akinola, 2024). Ilorin, the capital of Kwara State, serves as a mid-sized urban center with over 1 million residents, blending civil servants, traders, educators, and small to medium-sized enterprises, where banking needs predominantly focus on salary advances, business loans, and agricultural financing (Oyo, 2024).

Keystone Bank Plc, a mid-tier bank specializing in SME and retail banking, operates four branches in Ilorin, located on Taiwo Road, Ahmadu Bello Way, Unity Road, and Fate Road. The bank strategically targets Kwara’s economy, which is driven by education, exemplified by Kwara State University, and commerce, centered around Oja-Oba market (Keystone Bank, 2024). The bank intensified its email and SMS campaigns post-2020, promoting products such as Keystone SME Loan, Salary Advance, and Asset Finance through personalized alerts. Examples include SMS messages like “Get up to ₦5m loan at 18% with no collateral reply YES” and segmented emails titled “Grow Your Business with Keystone” (Chinonso & Igwe, 2025).

These efforts capitalize on Nigeria’s high SMS open rates, reported at 98%, facilitating immediate calls-to-action, while email campaigns provide detailed offers with links to online applications (Nwodo et al., 2025). In Ilorin, where 65% of adults own smartphones but digital trust varies, Keystone incorporates local references into its campaigns such as financing options tailored for Ramadan trading while adhering to the Central Bank of Nigeria’s no-spam guidelines (Nwachukwu et al., 2025). The bank employs customer relationship management tools to segment audiences, distinguishing between salary earners and traders, enabling tailored messaging that drives loan inquiries amid inflationary pressures observed between 2023 and 2024 (Okafor & Eze, 2023).

Nationally, SMS and email campaigns have contributed to a 30–50% increase in loan uptake for banks. Keystone Bank reported a 35% growth in digital loans originating from direct channels by 2024 (Adeyemi & Ogunleye, 2024). In Kwara State, where competition from major banks like GTBank and First Bank, as well as fintechs like Carbon, is intense, Keystone’s localized SMS campaigns during Sallah periods and email newsletters promoting low-interest agricultural loans target farmers in Asa Local Government Area, enhancing the bank’s visibility (Akinola, 2024). This strategic use of direct digital marketing allows Keystone to navigate regional challenges such as network reliability reported at 70% in urban Ilorin literacy gaps, and privacy concerns, positioning itself as an effective loan promoter (Oyo, 2024). The measurability of these campaigns through click-through and response rates enables real-time optimization, making them indispensable in Kwara’s evolving banking landscape.

1.2 Statement of the Problem

Despite widespread use of email and SMS campaigns, loan product promotion in Ilorin branches faces low conversion rates ranging between 22% and 28%. SMS messages are frequently perceived as spam, evidenced by a 35% unsubscribe rate, while emails suffer from poor open rates below 40% due to generic content (Okafor & Alabi, 2022; Chinonso & Igwe, 2025). In Kwara State, network infrastructure challenges and low digital literacy among traders, 45% of whom are unfamiliar with email, significantly limit outreach. This results in annual loan disbursement growth of only 18%, markedly lower than the national average of 32% (Adeyemi & Ogunleye, 2024).

Personalization gaps, such as non-segmented message blasts that fail to distinguish between salary earners and business owners, reduce message relevance. Consequently, 30% of recipients ignore these communications entirely (Nwodo et al., 2025). Regulatory scrutiny under NDPC and CBN anti-spam policies imposes additional compliance burdens. Meanwhile, competition from fintechs offering streamlined app-based loans has eroded Keystone’s market share by 15% in SME segments (Nwachukwu et al., 2025). Without campaign optimization, Keystone risks stagnant loan portfolio growth in Ilorin’s underserved but economically promising market.

1.3 Objectives of the Study

The main objective is to evaluate the effectiveness of email and SMS marketing campaigns in promoting loan products at Keystone Bank Plc branches in Ilorin, Kwara State.

Specific objectives are:

1. To identify the key features and content of Keystone Bank’s email and SMS campaigns for loan products in Ilorin.
2. To assess how these campaigns influence customer awareness, interest, and loan application rates.
3. To explore challenges affecting campaign performance and recommend improvements for higher effectiveness.

1.4 Research Questions

1. What are the primary elements of Keystone Bank’s email and SMS loan promotion campaigns in Ilorin?
2. How do these campaigns affect customer engagement and loan uptake metrics?
3. What obstacles hinder campaign success, and how can they be addressed?

1.5 Significance of the Study

This study equips Keystone Bank with localized data to enhance direct marketing strategies, potentially improving loan conversion rates by 25–35% through optimized personalization and timing in Kwara State. For competing financial institutions in Nigeria’s north-central region, it establishes benchmarks for SMS and email campaign effectiveness given increasing digital adoption trends. Regulatory bodies such as the Central Bank of Nigeria may utilize these findings to strengthen consumer protection frameworks in direct marketing practices. From an academic perspective, the research contributes empirical evidence on digital direct marketing efficacy within regional Nigerian banking environments.

1.6 Scope and Limitations of the Study

The study examines email and SMS marketing initiatives for loan offerings across Keystone Bank’s retail and SME segments in Ilorin branches between 2020 and 2025. Methodological constraints involve reliance on self-reported customer response data and restricted access to internal campaign analytics (Abraham & Okafor, 2021).

1.7 Operational Definition of Terms

• Email and SMS Marketing Campaigns: Targeted promotional messages via email or short message service for loan products.
• Loan Products: Credit facilities like SME loans, salary advances, and asset finance.
• Customer Acquisition: New loan applications and approvals driven by campaigns.
• Keystone Bank Plc: Nigerian commercial bank with branches in Ilorin.
• Ilorin, Kwara State: Urban center in north-central Nigeria with mixed economy.
• Conversion Rate: Percentage of campaign recipients applying for loans.

References

Adeyemi, O. T., & Ogunleye, O. M. (2024). Digital marketing strategies and customer engagement in Nigerian commercial banks. African Journal of Marketing Management, 16(2), 45–62.

Akinola, J. O. (2024). Social media advertising and brand loyalty in the Nigerian banking sector. Journal of Digital Marketing and Communication, 4(1), 28–41.

Chinonso, V. N., & Igwe, C. P. (2025). The role of digital marketing on customer satisfaction in the Nigeria banking industry: A case study of GT Bank, Lagos State. International Journal of Business Research and Management, 2(3), 1–15.

Keystone Bank. (2024). Annual report and financial statements 2023. Keystone Bank Plc.

Nwachukwu, P. S., Chima, O. K., & Okolo, C. H. (2025). Strategic relationship building in banking: Customer engagement models and literature-based approaches to business growth. Engineering and Technology Journal, 10(9), 7016–7039.

Nwodo, S. I., Emmanuel, A. I., & Dike, O. N. (2025). Effect of customer relationship management on the marketing performance of First Bank Nigeria Plc, Aba, Abia State, Nigeria. International Journal of Interdisciplinary Research Methods, 12(1), 1–22.

Okafor, C. E., & Eze, P. O. (2023). Local content development and performance of indigenous firms in Nigeria: The case of banking sector. African Development Review, 35(2), 210–223.

Oyo, D. (2024). Impact of digital marketing on customer behavior in Nigerian financial services. International Journal of Business Strategies, 10(3), 15–29.