Nigeria Confronts a Challenging Financial Inclusion Gender Gap

Jane Duasing

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Graphic from 2016 Case Study Nigeria Confronts a Challenging Financial Inclusion Gender Gap.

From 2011 to 2014, the number of women with access to bank accounts in Nigeria grew from 26.0 percent to 33.6 percent. However, the gender gap in terms of access to account widen from 7.3 percent to 20.7 percent. One reason for the persistent gender gap is that financial inclusion progress so far has been with traditionally easier to reach segment – primarily urban men.

According to Enhancing Financial Innovation & Access (EFinA), women in rural areas are the most financially excluded whether they live above or below the poverty line. Apart from geographical challenge, women represent a large percentage of young, less educated and lower incomes.

Specifically, EFinA findings identified five major barriers to financial inclusion for women in Nigeria: (i) lack of income, (ii) physical access either by distance or approach that does not work for women, (iii) financial literacy, (iv) affordability and (v) eligibility. The barriers to mobile money as highlighted by an InterMedia survey shows similar story: lack of awareness of mobile money, lack of knowledge on how mobile money works and low levels of trust. Nigeria would require different tactics to close the gender gap.

Opportunities to Expand Women’s Financial Inclusion

Evidence has been accumulating to support the usage of digital financial services in order to enhance opportunity for women to access finance. With 58 percent of Nigerian women owning mobile phones, the opportunity for mobile money uptake in Nigeria is significant. According to the Nigeria’s National Financial Inclusion Strategy, mobile payments are envisioned to be the ‘game changer’ for financial inclusion. Nevertheless, barriers to mobile money adoption such as low awareness, lack of knowledge and low level of trust need to be addressed to take advantage of this opportunity.

The EFinA’s 2014 survey has also called for the design of affordable financial products offered via appropriate delivery channels, as well as the importance to take the needs of women, youth and farmers into account, and offer a variety of products based on customer use. There is a wide opportunity for the financial industry to leverage on women’s preference as customers. For example, Diamond Bank has developed an innovative savings account (BETA account) that can be opened in less than five minutes with no minimum balance and no fees. Operating via agents known as BETA Friends, they would visit a customer’s business to open accounts and handle transactions using a mobile phone application. This was made possible through the implementation of simplified Know-Your-Customer (KYC) process by the Central Bank of Nigeria (CBN), which allows customers to open an account with only five pieces of customer data.

Nigeria’s National Financial Inclusion Strategy

Nigeria was one of the early signatories of AFI Maya Declaration. This includes at that point, finalizing the national strategy and reducing the percentage of financially excluded from 46.3 percent in 2010 to 20 percent  by 2020. Although the national strategy did not differentiate the targets by gender, the policy recommendations are important to women. One of the working groups established as part of the initiatives under the strategy, is charged with special interventions, which covers women, youth and the disabled.

Currently, the working group is focusing on how to incorporate gender considerations into the development of financial products and services. For example, the working group is engaging with the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) to enhance access to agricultural finance for women.

The Central Bank of Nigeria also believes that engagement with both public and private sectors is necessary to effectively close the gender gap.

A new case study of policy change to support women’s financial inclusion by the Alliance for Financial Inclusion (AFI) and Women’s World Banking examines smart policy strategies in Nigeria to promote women’s financial inclusion. One of the key policy moves is the implementation of the simplified KYC regime, which is one of the important outcomes of the National Financial Inclusion Strategy.

In 2016, the Secured Transaction and National Collateral Registry will be launched to facilitate the use of movable assets as collateral for either business or consumer credit. In the case of Nigeria, policy formulation and intervention to support women’s financial inclusion have seen some success in certain areas. Multiple initiatives are currently underway to address areas that have not received much attention.

To further examine Nigeria’s policy changes and strategies in addressing barriers and potential opportunities, please click here to access the case study “Nigeria Confronts a Challenging Financial Inclusion Gender Gap”.

Jane Duasing is a Senior Policy Analyst at the Alliance for Financial Inclusion. 

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