Nigeria’s central bank advances women’s access to finance

By Paul I. Oluikpe, Head of Financial Inclusion Secretariat, Central Bank of Nigeria

Nigeria’s National Financial Inclusion Strategy (NFIS), is targeting an increase in the number of adult Nigerians with access to formal financial services to 80 percent by 2020. This ambitious goal is led by the Central Bank of Nigeria (CBN) and aims to increase financial inclusion by 16 percent, from roughly 64 percent in 2010.

Initially launched in October 2012, and updated in January 2019, the Strategy identified five of the most excluded demographics: women; youth; micro, small and medium enterprises (MSMEs); rural dwellers; and individuals living in the country’s northern regions.

Amid sustained focus on the five aforementioned groups, the financial inclusion of women has been an area of key concern as the financial inclusion gender gap in Nigeria is higher than the global average of seven percent. According to a 2018 survey by Enhancing Financial Innovation and Access (EFInA), financial inclusion nationwide stood at 59.1 percent for women compared with 67.5 percent for men, a gender gap of 8.4 percent, a slight improvement from a gap of 9.8 percent recorded in 2016.

As regulators,but also as a coordinating and liaison office for all financial inclusion stakeholders in Nigeria, CBN, through its Financial Inclusion Secretariat (FIS), is always on the lookout for stakeholders that can further accelerate the inclusion of women. The central bank, in turn, enacts policies and partners with stakeholders to develop products and continuously facilitates an environment for recommendations from stakeholders.

In the drive towards ensuring that more women are financially included in Nigeria, CBN has championed major activities and products tailored to accelerate women’s financial inclusion. Standout examples include the establishment of the MSME Development Fund (MSMEDF) and the inauguration of the National Financial Inclusion Special Interventions Working Group (NFISIWG).

The MSMEDF is a NGN220 billion (approximately USD 717 million) intervention fund set up by CBN that takes into consideration the unique challenges faced by women in accessing credit and has earmarked 60 percent of funds (NGN132 billion, or roughly USD 430 million) for women. Funds are distributed directly to beneficiaries via participating financial institutions.

Meanwhile, the NFISIWG is a key element of the governance structure in the Nigeria’s NFIS implementation. Its activities cover three key areas: women, youth and people living with disabilities. Under the working group, a sub-committee was established in March 2018 to address issues that hamper women’s access to financial services.

In carrying out its terms of reference, the sub-committee interviewed women groups, visited key women-focused stakeholder organizations, requested reports on women’s financial inclusion activities from all deposit money banks in Nigeria, among other things. It then submitted a final report containing 13 key recommendations for implementation to accelerate women’s financial inclusion.

Activities of the sub-committee led to a gender landscape study/assessment of women’s financial inclusion in the country and the development of a framework on access to finance for women in Nigeria. The former document highlighted key barriers hindering women’s access to finance, including both a lack of income and education as well as limited trust in financial service providers (FSPs).

The study’s overarching recommendation was the need to build demand by prioritizing activities and interventions that will increase women’s income, education and/or trust in FSPs. The framework, which is currently being reviewed, will aid implementing stakeholders in driving an increased uptake of financial products and services for women.

A newly established gender desk at the FIS reached out to AFI for support to develop a document that will shape innovative thinking around policy development by regulators and product development by FSPs to advance financial inclusion of women in Nigeria.

To facilitate this, AFI awarded the Secretariat with a grant to develop a National Women’s Financial Inclusion Strategy, a document designed to complement the central bank’s revised NFIS and outline specific targets for women’s financial inclusion while providing guidelines for ‘gender-friendly’ policies and product development by regulators and FSPs.

As the journey to bridging the financial inclusion gender gap in Nigeria gains momentum, it is important to keep sight of the many challenges confronted in advancing financial services and products to women. Specific barriers that women face include long distances to reach access points, particularly as women living in rural areas are often saddled with household responsibilities, lower levels of literacy and legal restrictions like property ownership.

Going forward, the drive to provide financially excluded women with tailored products and an appropriate enabling environment through policies and regulations that entrench gender considerations will support the central bank’s efforts to increase access to finance for women and an overall achievement of 95 percent financial inclusion in Nigeria by 2024.

The FIS will continue striving to reorient regulators, FSPs, FinTechs and other enabling institutions to ensure that they shift their focus to the female segment of the populace who form a viable part of the Nigerian economy.

AFI’s Gender Inclusive Finance workstream is financed by the Swedish International Development Cooperation Agency (Sida) and other partners.