Onyeka Akpaida, the founder of Rendra Foundation, an agency working to promote financial literacy among northern women, in this interview with SAMUEL ABULUDE, outlines ways of bridging the financial inclusion gap for women in the North
How can we foster the adoption of financial services amongst northern women in 2021?
The focus globally in 2021 beyond the distribution of COVID-19 vaccines will be economic recovery, especially for vulnerable populations as the resulting economic crisis from the pandemic has emphasised the vulnerability of low-income women, making financial inclusion ever more critical as a means for women to recover from the global crisis and build resilience in the long-term. Evidence shows there is low fintech adoption which is a fallout from low financial inclusion of women in the north and if we can lower the financial exclusion gap in the region, we will gradually see an increase in fintech adoption.
Digitizing government to person payments for social safety programmes focused in the North will easily increase inclusion; however, moving from access to usage will require fintech serving customers in the region, to provide relevant, localised and simple financial services or products that match their literacy levels.
The Rendra Foundation is currently focused on the North and when we engage these women who have never had bank accounts, we start by demystifying and simplifying financial services, making it relatable to their current operations. Northern women living in rural communities may not have a formal bank account but they are involved in the local “Adashe/Ajo” which they use for savings and accessing microcredits.
What specific challenges would you say the framework for advancing women’s financial inclusion in Nigeria would likely face?
The overarching vision of the framework is for Nigeria to be globally recognised, with an inclusive financial sector that has closed the gender gap by 2024 as well as itemize eight strategic imperatives for driving improved access to finance for women in Nigeria.
I consider these eight imperatives as well thought-out and if properly implemented will be a game-changer in closing the financial exclusion gap of women in Nigeria but to answer this question, I will highlight four of the eight strategic imperatives: Expansion of the issuance of national identity numbers to reach all Nigerian women, among other actions to ensure increased account ownership for women.
Today, Tier 1 accounts can be opened for women without any form of identification but will eventually get restricted when the account holder exceeds the account threshold. Expansion of the issuance of national identity numbers can improve onboarding and avoid account restriction. NIBSS and NIMC should expediently complete the integration between the NIN system and the BVN database.
We should consider using the NIN for e-KYC services and NIMC should start providing technical information to banks and other DFS providers on the technical aspects of using NIN for customer onboarding so that the industry is ready for the eventual migration from systems relying on the BVN.
Digital and financial literacy education for women play a key role in financial inclusion as demonstrated by the rise of mobile banking and fintech applications in recent years, yet there is a significant gap between access and usage especially for women. Women are less integrated into the digital world.
While women have access to mobile phones in Nigeria, there is a very significant gender gap (15 per cent) in mobile internet users (35 per cent of women as opposed to 50 per cent of men, according to 2019 GSMA data) The application of digital literacy and financial literacy will address women’s limited use of Digital Financial Services (DFS) especially when factors like literacy, numeracy, design, access, social norms and consumer awareness of women are being considered. These factors are enablers that need to be in place for digital and financial literacy to have an impact on women’s uptake and use of financial services.
A Gender-considerate fintech market, which provides products aimed at financial inclusion for women, today only 22 per cent of Fintechs are adopting a gender-inclusive design approach to customise their solutions for women as they are ignoring their own gender-disaggregated data to evaluate the true market opportunity, allowing biases about the women’s market to creep in. Evidence suggests women are a lucrative customer base – both as individuals and as business owners as they are loyal, save more and have a higher loan repayment rate than men. Therefore, organisations taking a gender-inclusive approach stand to benefit considerably.
Develop financially sustainable products and delivery systems that respond to low-income women’s needs. There is no one size fits all approach that will address the gender gaps in financial inclusion as the needs of women vary with age, literacy and income levels, cultural norms, etc and financial service providers have to take all these factors into consideration. Currently, when a person accesses credits, the repayment is usually monthly but if you were to disburse credit to a low-income woman, it will be effective to personalise her repayment structure to mitigate against default.
For this category of women, you will be doing them a disservice if you structure the loan repayment as weekly or monthly; what will be more feasible will be a quarterly payment. Financial service providers must understand the challenges low-income women face and ensure products and delivery systems meet them where they are and are relevant to create sustainable changes for these women. Fintech has been touted as a game-changer in terms of raising the rate of financial inclusion in Nigeria and achieving economic growth. For example, fintech activity could attract $3b in foreign direct investments.
How do you think financial technology-based solutions can serve as a catalyst to bridge the inclusion gap in general?
During the lockdown as a result of the COVID-19 pandemic last year, financial institutions had to leverage on digital financial services (DFS) to serve customers while ensuring safety protocols were adhered to.
In Bangladesh, there was a stimulus package to cover for salaries of workers in export focused businesses like garment factory workers. They hit a snag when they discovered only 1.5 million of the 4 million workers were paid digitally; the rest were paid in cash. To ensure that the money reaches the right recipients, factories were mandated to submit mobile account details of factory workers. In just 25 days, 2.5 million accounts were opened through mobile financial service; this could have only been possible through financial technology.
Once fintech companies can effectively provide and deliver inclusive solutions that address the barriers women face in accessing and using financial services, we will definitely see improvement in bridging the gender inclusion gap. According to EFInA survey, women account for 35 per cent of financial services agents.
Does low number of female agents have any effect on the financial inclusion gender gap?
Looking at the EFInA survey, the majority of the sample agents are based in the South East and South West with reduced numbers in the North. The survey also showed that 48 per cent of the customers preferred to engage with agents of the opposite gender compared to 34 per cent of customers who preferred agents of the same gender. If the sample size had more agents in the north, the agent engagement metrics by gender will be slightly different as cultural norms in the north will see women gravitate more to female agents.
One of the identified challenges of financial inclusion for low-income women is lack of trust and part of the measures identified in addressing this challenge is for more women to be involved in the delivery system of financial services. Let us consider women in rural areas who have strong community groups they are engaged in; these women have local women influencers like the women leader of the market, president of the village meeting who they look up to. If these “local influencers’’ are driving financial inclusion in their communities as agents, there will be increased access and usage which will ultimately reduce the gender gap in financial inclusion.
Low participation of women as agents will not be doing us any favours in closing the gender gap and we need to look for innovative ways to increase their participation. As COVID-19 highlighted the vulnerability in much of Nigeria’s informal economy, the federal government launched several initiatives to build the resilience of this sector. For example, Mrs Aisha Ahmad, deputy governor of CBN on financial stability and chairperson of the national financial inclusion technical committee disclosed that 134,000 women received funds from the micro, small and medium enterprises development fund (MSMEDF).
What sustainable solutions do you see as essential to the financial empowerment of low-income women?
Many of these intervention programmes do not get to women at the bottom of the pyramid as they are either not aware, or qualified to access these funds. Working with women focus and community groups like registered cooperative societies will help include more low-income women into these intervention programmes as they should be allowed to apply on behalf of the women in their groups. This provides an opportunity for the government to have access to the data of women micro entrepreneurs and those working in the informal economy which can be used in creating and implementing relevant intervention and policies more effectively. Secondly, these intervention programmes are only accessible to women who are financially included. This buttresses the need for the government to throw their weight in ensuring the financial exclusion gap for women is drastically reduced.
Part of the imperatives in the financial inclusion framework is expanding the issuance of national identity to increase account ownership by women; what measures are in place to guarantee this happens. It goes beyond giving a two week or three-week deadline with no clear plan to ensure the NIMC is equipped to register everyone in one fell swoop. I have always believed that our challenge is not the absence of policies but the effective implementation of policies. The CBN should actively and continuously engage stakeholders working with low-income women in getting real information backed up by data about the issues faced by these women and see how we all can work together in addressing these challenges effectively.
What are your key takeaways as it relates to female financial empowerment especially looking at what happened last year?
The COVID-19 pandemic and the resulting economic crisis exacerbated the vulnerability of low-income women, making it even more crucial for us to leverage on financial inclusion as a means for women to recover from the global crisis and build resilience in the long-term. Ensuring that women have the knowledge and skills required to access credit to build their businesses, save funds for emergencies and protect their families and businesses against future shocks will be pivotal to global economic growth and recovery post-COVID-19.
This year, many traditional and non-traditional financial service providers leveraged digital financial services (DFS) to serve customers and it is clear that digital innovation and Fintech is the future of financial services