On Monday, September 28, 2020 the Central Bank of Nigeria (CBN) exposed a new framework to drive financial inclusion among women.
The “Framework for Advancing Women’s Financial Inclusion in Nigeria” detailed out strategies to help advance financial inclusiveness among women.
The framework provides the blueprint for driving sustainable access to and usage of financial services by women in Nigeria.
Recall that in March 2018, the National Financial Inclusion Special Intervention Working Group (a working group under the National Financial Inclusion Governance structure) constituted a subcommittee to look into gender-related financial inclusion issues and propose recommendations for addressing the high exclusion rates among women in Nigeria.
One key recommendation of the subcommittee was to develop a comprehensive framework that provides a guide and blueprint for women’s financial inclusion.
This Framework is the outcome of the gender subcommittee’s work and follow-up work by the Central Bank of Nigeria (CBN) and Enhancing Financial Innovation and Access (EFInA). It builds upon the National Financial Inclusion Strategy (Revised) (ctober 2018), and integrates valuable insights from the Assessment of Women’s Financial Inclusion in Nigeria (December 2019).
This Framework takes as an additional reference point Nigeria’s Sustainable Banking Principles, which promote women’s economic empowerment through a gender inclusive workplace culture in business operations and seek to provide products and services designed specifically for women.
Alongside these national reference points, the Framework is based on what is considered international best practice in advancing women’s financial inclusion.
The CBN in its framework reckoned that developing a women-specific strategy stems from the recognition that it is important to treat women as a critically important and distinct customer group, rather than as a subset of a broader group, for example “vulnerable”; it recognizes also that there are specific segments within this customer group.
With this perspective in mind, the Framework builds upon the 2018 National Financial Inclusion Strategy (Revised), but makes the important distinction that the 2018 Strategy is framed collectively as “women, Micro, Small and Medium-sized Enterprises (MSMEs) and people living in the most excluded regions (North East and North West),” whereas this Framework is focused entirely on women’s financial inclusion, addressing the financial inclusion of all categories of Nigerian women, young and old, throughout the country.
The Framework carves out the barriers of particular importance to women, laying out eight strategic imperatives and related recommendations with the greatest potential for addressing these barriers.
The Framework identifies key barriers to access to finance for women in Nigeria, and identifies strategic imperatives and related recommendations within the boundaries of the financial sector space.
The 2018 EFInA Access to Finance survey in Nigeria shows that the national financial inclusion rate was 58.9 percent of women compared with 67.4 percent of men or a gender gap of 8.5 percent.
The gap is particularly acute in rural areas: 24% of women in rural areas register ownership of formal accounts, as opposed to 54% of men. The unserved and underserved women are concentrated in the lower income segments of the population (monthly income under N40,000).
There are also significant variations among Nigerians, with the gender gap differing significantly among regions of Nigeria. The gender differences in financial inclusion are also apparent in the types of financial services or products available in the market, with the gender gap playing out across the board4 . Few Nigerians borrow from banks (1.6% of men and 1.0% of women).
Nigerian men are considerably more likely to save in a bank (25.8% of men; 16.3% of women). Women are more likely to save with informal mechanisms only (21.9% of women, 15.1% of men). Roughly twice as many men as women are likely to have a pension product (10.6% of men, 5.4% of women).
The gap continues in the realms of remittances: 26.1% of men vs. 18.6% of women use bank services to receive remittances. The lack of insurance products is striking across genders: only 2.4% of men and 1.0% of women have one or more insurance products. Also financial access is skewed towards male adults Adult men are more likely to be banked than adult women Adult women tend to use more formal-other and informal financial services than adult men.
The Alliance for Financial Inclusion (AFI), including Nigeria, committed in 2017 to the Denarau Action Plan to increase women’s access to quality and affordable financial services globally — bridging the financial inclusion gender gap. The Denarau Action Plan targets to accelerate the progress of women’s financial inclusion by halving the financial inclusion gender gap across AFI member jurisdictions by 2021. The Plan outlines ten steps to support the commitment of AFI members to close the gender gap in financial inclusion.
The CBN said in the document that closure of the gender gap is important not only because it is part of the achievement of Nigeria’s overall financial inclusion target, but also because of the potent value proposition of women’s financial inclusion in the context of Nigeria’s economic and social development. The targets (milestones) and corresponding time horizons are based on the current economic and social context in Nigeria and the current analysis of barriers and opportunities.
The full impact of the global COVID-19 pandemic is unknown, but it will certainly affect financial systems, real economies, and entire societies. While it is too early to make adjustments here, the timeframe for achieving the targets may need to be re-examined in function of the impact of the pandemic over time. However, the vision will not vary, nor the high level of ambition of achieving it.
Women’s financial inclusion is an important element in striving toward the broader goal of women’s economic and social empowerment. Financial inclusion is not an end in itself — it is a means of improving livelihoods and fostering women’s economic and social empowerment.
The case for a major push to reduce the gender gap in women’s financial inclusion in Nigeria is clear: the value proposition of women’s usage of a broad range of financial products and services suited to their needs and delivered easily is compelling. Given this value proposition, developing a women-specific strategy stems from the recognition that it is important to treat women as a critically important and distinct target group.
This framework – designed to leverage this value proposition— is an important complement to Nigeria’s 2018 National Financial Inclusion Strategy. The Framework lays out a list of ambitious recommendations for translation into action, structured around eight strategic imperatives.
Defining this landscape for action is just the beginning of a process of assigning responsibilities among stakeholders and building concrete action plans that ensure the implementation of the recommendations in a concerted effort among well-aligned stakeholders.
This will bring Nigeria not only to closing the financial inclusion gender gap but to ensuring economic and social empowerment, leading to prosperity for Nigerian women, their families, and their communities.