Government must prioritise financial inclusion of women to achieve economic growth – Nkem Okocha
Nkem Okocha is the founder of Mamamoni, a social enterprise that empowers poor rural and urban slum women with free vocational/financial skills and micro-loans. In this interview with BUNMI BAILEY, Okocha speaks on her work at Mamamoni, poverty and how to alleviate it, and what can be done to ensure access to finance for marginalised groups. Excerpts: Multilateral institutions such as the World Bank define poverty in absolute terms. For example, people earning less than $1.90 a day are considered extremely poor. In your opinion, does this definition of poverty apply to Nigeria?
Yes, this definition of poverty is applicable to Nigeria. At Mamamoni, our beneficiaries are lowincome women who work in the informal sector and live in rural communities. These women are hairdressers, traders, cleaners and so on and they earn less than $1.90 a day (equivalent to about N723). This amount is barely enough to cover transportation and feeding costs. For example, some of our beneficiaries who hawk soft drinks for a living purchase a pack of Pepsi at N1,000 instead of N950 because they buy from wholesalers who freeze the drinks for them at N50. There are 12 bottles in a pack, these hawkers make N200 per pack and N800 for selling four packs in a day depending on the weather. Given the current economic recession and food inflation, over N400 would be spent on transportation and feeding the family with four-five children. At the end of the day, they barely have enough for savings and funds to cover other costs. This provides a bird’s eye view of the dire situation and experiences of many Nigerian families with some others having it worse than what I have described.
The World Poverty Clock recently revealed that over 105 million Nigerians now live in extreme poverty. Would you say Nigerians are poorer than their counterparts in developing or developed countries and why?
In delivering effectively on our objectives at Mamamoni, we are required to work in low-income communities and from experience I believe it is safe to say that there is widespread poverty in Nigeria. When you compare this to developed countries, the situation is very dire and this can be linked to unstable household income, unemployment, lack of basic social amenities, illiteracy, unemployment, inflation, economic recession, inadequate support from the government, amongst other key developmental issues. If the right policies and plans are not quickly developed and implemented, Nigeria may well be on its way to competing closely with some of the poorest countries across the world. Sadly, the outbreak of the coronavirus disease and drop in oil prices further exacerbated the poverty situation of many Nigerians, especially low-income women. The results are out and Nigeria is officially in a recession.
What are some of the solutions that can help alleviate poverty?
There is a need to provide basic
education and skills. Every human must have the basic education and skills that would help them generate income. This is crucial especially with girls who will become women with the responsibility of bringing up their families and transferring critical values to their children that could determine their own live outcomes. Girls do not have enough access to formal education, especially in Northern Nigeria, due to socio-cultural barriers. According to UNICEF, the primary school attendance rates of girls in north-eastern and northwestern states are 47.7 percent and 47.3 percent, respectively.
Another area that must be addressed is the creation of an enabling environment and access to finance for MSMES to thrive. Although the government is making notable efforts to cushion the effects of COVID-19 on MSMES through the N2.3 trillion MSME Survival Fund, these businesses would not thrive if foundational challenges such as access to finance, under-capitalisation, irregular power supply, fiscal taxes are not addressed. Hence, the government must create and implement policies that address these issues. Access to finance for low-income Nigerians, especially women, has been identified as one of the reasons people are poor. They do not have access to financial services like loans, grants, saving facilities and are therefore unable to make a living. The public sector needs to continue to make the required investments and collaborate with the private and development sector for the country to enjoy the benefit of financial inclusion and close the huge gap that currently exists.
A low-hanging fruit will be funding of critical sectors, like manufacturing and industrialisation, of the economy that are sure to create massive employment for the teeming Nigerian population.
The country may also look to economic diversification. Nigeria’s current economic predicament is due to its overdependence on oil and neglect of other economic sectors such as the informal economy. For example, the informal economy contributes 41 percent to the country’s GDP, yet 92.1 percent of the women workers do not have enough access to any financial services such as loans or other forms of social protection. The government must prioritise the financial inclusion of this segment to achieve economic growth and create jobs.
What initiatives have you and your team taken to educate Nigerians on the level of poverty in the country and what activities has Mamamoni executed to alleviate poverty within the country?
Mamamoni contributes to poverty alleviation in Nigeria by empowering low-income women. We empower these women through three initiatives. We offer vocational and financial training to lowincome women in areas such as catering, ankara craft, chemicalbased productions, etc. Empowering them with these skills will help them generate income. We do this through workshops within their respective communities including Ikotun, Igando, Ijegun, Makoko, Ajegunle, Irrua or inviting them to our innovation centre in AmuwoOdofin for a one-month training programme. During the training programme, these women also learn financial and business skills to help them manage their businesses effectively. Since inception, we have up-skilled over 7,000 lowincome Nigerian women.
Access to finance for low-income female entrepreneurs is another area of our intervention. Despite their resourceful and hardworking nature, low-income women are unable to access funding from formal financial institutions. This is because they have little or no financial/credit history, lack collateral, etc. To address this challenge, our platform (www. mamamoni.org) has partnered with public and private stakeholders to ensure these women can access grants easily that will be invested to start, sustain and expand their small businesses. Through this initiative, we have funded the businesses of 1,100 low-income women.
We also provide employment opportunities through our Levanter Dish Wash factory by Mamamoni. After engaging with some of our beneficiaries, we discovered that not all of the women wanted to start a business due to certain challenges, including cultural and religious considerations. We therefore created a liquid dish wash factory that employs women in the community, thereby creating means of livelihood for these women.
How does improved access to financial services for the most marginalised lead to economic growth and improved welfare?
I have seen through our work how women who had lost hope because they have been written off due to being termed high risk by commercial banks become financially independent. Access to finance for the people at the bottom of the pyramid creates a positive effect and transforms our local economies. When they get funding, they can grow their businesses. This also leads to increase in household income which has an impact on children’s education, health, etc.
The Central Bank of Nigeria’s 2020 goal was to achieve 80 percent financial inclusion. In your opinion, what kind of policies would you like to see implemented in order to ensure access to finance for marginalised groups?
I would like to see the following policies implemented:
Unified Identity Management – The government must build an identity management system that unifies existing data from 13 federal and state identity systems, bank verification number, sim card registration, etc, while taking into consideration the challenges faced by marginalised groups.
Zero account opening balance with all commercial banks – Since low-income women earn less than $ 1.90 per day, formal financial institutions must ensure they can create accounts with no cash. Alternatively, the government can partner with fintech companies such as Kuda Bank that provide this service to ensure they register the most vulnerable groups such as low-income women.
Mandate commercial banks to lend a specific percentage of funds to the financially excluded – If formal financial institutions are required to lend 10 percent of their funds for example at zero/low-interest rates, this would address low-income women’s financial challenges.
In delivering effectively on our objectives at Mamamoni, we are required to work in low-income communities and from experience I believe it is safe to say that there is widespread poverty in Nigeria
What advice would you give formal financial institutions (FFIS) as they work to develop and deliver solutions to financial exclusion in Nigeria, especially in these uncertain economic times?
I would recommend partnerships with social enterprises and civil organisations like Mamamoni that are already working with the financially excluded. If more FFI’S support civic organisations like Mamamoni with funds and technical assistance, reaching underserved and unserved communities would be easier. Secondly, FFI’S must start prioritising impact over profit. As a changemaker, I have noticed that investing in financially excluded groups leads to improved societal welfare. Finally, they must build trust with the financially excluded by ensuring products and services cater to the most vulnerable needs.