Women’s financial inclusion is important for the same reasons that financial inclusion in general is important. At the macro-level, an increase in financial inclusion can lead to higher economic growth as well as lower income inequality. For individuals, greater financial inclusion can improve the economic and social aspects of life. Given existing financial inclusion gender gaps (see Table 1), financial inclusion is especially important for women. Also, studies have highlighted the benefits of financial inclusion to women. For instance, it has been shown that access to savings accounts not only increased savings, but also helped improve women’s investment and decision-making power in the household. When women save money, they are more likely to invest in their families and communities than men.
The financial inclusion gender gap in Nigeria
In Nigeria, the number of financially-included adult women increased by 4.7 million between 2012 and 2014. This is promising, although the sobering reality is that male inclusion is still much higher. Across five different indicators in the 2014 World Bank Global Findex, women lag behind men in access to financial services. Even though Nigeria has a higher level of financial inclusion than Sub-Saharan Africa across three of the five indicators (for both men and women), the country’s gender gap is higher than the one of the Sub-Saharan Africa region in four of the five indicators.
Table 1: Financial Inclusion Gap Between Men and Women in 2014, Nigeria and SSA
The absolute gap refers to the difference in percentage points between the male and the female values of the respective indicators; the relative gender gap indicates the percentage by which the female inclusion needs to increase to eliminate the difference.
|2014||Nigeria||Sub-Saharan Africa (developing)|
|Female||Male||Abs. Gap||Rel. Gap||Female||Male||Abs. Gap||Rel. Gap|
|% Account at a financial institution||33.6||54.3||20.7||61.8%||25.1||32.7||7.6||30.2%|
|% Saved at a financial institution||21.4||32.5||11.1||51.7%||13.5||18.4||4.9||36.1%|
|% Borrowed from a financial institution||4.1||6.4||2.3||54.5%||5.7||6.9||1.1||19.4%|
|% Debit card used in the past year||9.1||19.0||9.9||108.7%||7.1||10.2||3.0||42.6%|
|% Mobile account||2.1||2.5||0.4||21.3%||10.3||12.8||2.5||24.5%|
Source: Global Findex, 2014
What are the barriers to financial inclusion for women in Nigeria?
The Central Bank of Nigeria (CBN) has identified five key reasons that Nigerian adults do not have a bank account:
- No job or irregular income
- Unaffordable cost of financial services
- Financial literacy issues such as illiteracy and lack of trust
- Eligibility issues such as identification documentation requirements
- Limited physical access (access points too far away and transport costs too high)
The Financial Inclusion Insights (FII) Tracker 2014 Survey of Nigeria indicates that the first four barriers are more likely to be an issue for women than for men. In addition, CBN-internal analysis has shown that household decision-making dynamics play a role in restricting women from taking up financial services. Specifically, if the husband is responsible for managing the finances and the wife for taking care of the household, this could impact the likelihood of women becoming financially included. Additionally, it would reinforce some of the other barriers regarding education and earning a formal income.
What can be done to lower the barriers to female financial inclusion in Nigeria?
Financial service providers certainly have a central role in developing products that are more affordable and accessible to low-income earners, adopting tiered know-your-customer (KYC) requirements, and finding ways to design products that match customers’ levels of financial literacy. But policymakers will need to take action that opens the path for providers to innovate new products and explore new delivery methods tailored to low-income earners.
- Income and cost barriers: Policymakers in Nigeria have already taken specific action to increase accessibility of financial services to low-income earners, specifically women. The CBN established the Micro, Small and Medium Enterprise Development Fund (MSMEDF) to provide funding to participating financial institutions for onlending to micro, small and medium enterprises, with a requirement that participating financial institutions disburse 60% of the fund’s $110 million to women entrepreneurs.
- Financial literacy barriers: The CBN established a Financial Literacy Working Group that develops and implements financial literacy activities to drive financial inclusion. Additionally, a Financial Inclusion Special Interventions Working Group deals with issues related to women, youth and the disabled.
- Eligibility issues: The CBN implemented Three-Tiered Know Your Customer (KYC) Requirements that provide flexible account opening requirements for low- and medium-value account holders.
- Cultural norms: Policies and products should be designed based on a better understanding of cultural norms, household decision-making dynamics and customer needs. This requires research and data collection. The CBN has started to collect sex-disaggregated data, which is a key element in learning more about the financial needs of Nigerian women. Awareness campaigns by policy makers and service providers can also help remove misconceptions about financial services or institutions.
To close the existing gender gap, both policy makers and service providers need to specifically address the identified barriers by performing research and analysis on the financial needs of Nigerian women and customize policies and business strategies accordingly. Several policies tailored to women have already been initiated in Nigeria. As a next step, Nigeria needs to ensure policies are implemented successfully so that they reach the market woman in Yobe as well as the lady producing textiles in Lagos.
Yoly Nig. Ltd has identified the absence of viable, effective, and accessible agent networks in rural communities as a major factor militating against the holistic adoption of mobile money. No matter the number of programs introduced to rural communities to drive the up-take of mobile money, the absence of viable agents is always a great set back.
Aside consummating mobile money transactions, agents also act as brand ambassadors and assist in no small measure in educating people on the importance and usage of mobile money. The agent is the focal point, and the community relations officer as far as mobile money transactions is concerned. It would therefore be safe to say that; agent presence is inextricably linked to mobile money success, especially in rural areas.
From our experience with cash disbursements in rural communities, the agents only visit the community on the agreed payment day. After that, no activity occurs again until the next payment. The beneficiaries of such disbursement projects cannot use the monies except the agent is around. They cannot initiate P2P transfers because the recipient has no way of converting the electronic cash value into physical cash.