CBN, banks in ambitious move to close financial inclusion gap among women
The ultimate objective of Nigeria’s Central Bank within five years of second administration of Godwin Emefiele, governor of CBN, is to ensure that 95 percent of eligible Nigerians have access to financial services by 2024.
To achieve the target, there is need for closure of the gender gap in the country. The 2018 Enhancing Financial Innovation and Access (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.
is planning to move financial inclusion gender gap from 8.5 percent (based on 2018 data) to no gender gap in 2024.
The Bank disclosed this in the Framework for Advancing Women’s Financial Inclusion In Nigeria released last week, specifically September 29, 2020.
Financial inclusion is all about individuals and businesses having access to useful and affordable financial products and services that meet their needs, including transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.
Presently, nearly one billion women around the world do not have access to formal financial services. According to the World Bank’s latest Global Findex Database, 58 percent of women had a bank account in 2014 versus 47 percent in 2011. But on the flipside the gender gap between men and women’s access to financial services in developing economies stands still at nine percentage points. That gap is even wider in some regions, 18 percent in South Asia, and in the Middle East, where men are twice as likely as women to have an account.
Given the persistency of the gender gap in financial inclusion, members of 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 Framework released by the CBN was developed in conjunction with the Financial Inclusion Special Interventions Working Group (FISIWG), EFINA, and Women’s World Banking (WWB).
The Framework identifies the key barriers to attaining this goal, frames the strategic imperatives and recommendations required to overcome these barriers, and sets the stage for the formulation of a set of actions that are implementable, feasible, and trackable. This blueprint will have a separate implementation plan that includes the specific roles and responsibilities of all relevant stakeholders in improving access to finance by women in the country.
The goal of attaining the financial inclusion of Nigerian adult women and men at equal levels by end 2024 is ambitious. However, the CBN has provided indications of what would be required to achieve the ambitious overall financial inclusion target.
These include product development, financial education and consumer protection, the leveraging of digital platforms, and the proliferation of agent networks. An ambitious financial inclusion target cannot be reached without closing the gender gap; this entails addressing these requirements, and others, with a gender lens.
As part of efforts to give Nigerian businesses access to cheap credit, the Apex bank last month after the two day Monetary Policy Committee (MPC) meeting held in September, surprisingly cut its benchmark interest rate by 100 basis point to 11.5 percent from 12.5 percent in May 2020.
However, Gbolahan Ologunro, a research analyst at Lagosbased CSL Stockbrokers said, “the recent decision by the MPC to reduce the Monetary Policy Rate (MPR) is aimed at aligning market rates with the MPR given the current wide divergence. More importantly, this corroborates the apex bank’s agenda in stimulating credit creation in the economy through reduction in lending rate amid declining output. Recall the CBN reduced the interest on savings deposit to 10 percent of MPR from 30 percent in order to drive down cost of funds for DMBS and in turn support lower lending rates. With this decision, the interest rate on savings accounts will trend further downwards. However, this may not translate into any meaningful improvement in loan creation in the economy, as banks will likely remain cautious in expanding their loan book due to the multiplicity of headwinds in the operating environment”.
More, so, the CBN reserves 60 percent of its N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) for women entrepreneurs.
Some of the Nigerian banks have tailored their products and services to meet the financial needs of women. In a bid to promote best practice and support women entrepreneurs globally to drive change, economic expansion, and advance communities around Africa, Access Bank Plc through the W Initiative has deepened its relationship with female entrepreneurs in Nigeria.
Wema Bank Plc recently partnered with insurance AIICO Insurance Plc and AIICO Multishield Health Management Organisation (HMO), to provide better healthcare services for its women.
In line with the bank’s initiative, the partnership seeks to enhance the lifestyle and general well-being of women within the community.
Ecobank Nigeria on July 2020 unveiled a special loan package for female entrepreneurs in the country. The Ecobank Female Entrepreneurs’ Initiative (EFEI) loan is specially designed by the bank to financially empower female business owners and entrepreneurs in the country.
First Bank of Nigeria has reiterated its commitment to empowering women through its Firstgem product and other array of services.
Guaranty Trust Bank plc, recently partnered African-focused entrepreneurship accelerator, She Leads Africa (SLA) and the Work in Progress! Alliance (Oxfam and Vc4africa) to launch the She Leads Africa Accelerator, a 3 month program designed to identify, support and fund the next generation of Nigeria’s brightest female entrepreneurs.
Women’s financial inclusion is not only a powerful force in the economy and in society: it is a particularly powerful force. While both men and women benefit from financial inclusion, there is evidence that economic inequality falls more when women have greater access to finance than when men have greater access, the framework stated.
Responding to the CBN’S move, Bunmi Lawson managing director/ceo, Edfin Microfinance Bank Limited, said the CBN should be commended for focusing in the gender gap when it comes to financial inclusion.
Lawson who doubles as director of EFINA said the research based firm had done extensive research on the issue which shows that financial inclusion is worse amongst women across all geopolitical zones.
“The plan while laudable is very ambitious given the historical progress made in achieving financial inclusion as well as the current economic situation. Typically a slowdown in the economy results in more people being financially excluded,” Lawson said.
Specific, she said incentives have to be given to financial institutions as well as organisations focused on women to enable more women become financially included. It is not just about opening a bank account but also ensuring they have income in a sustainable manner to enable them use and benefit from having access to financial services.
“Government for instance could run a program around maternal care to give discounts if a woman has a bank account and seeks to access government services. It is a step in the right direction Government should work with MFBS and non-traditional organisations focused on women to drive the implementation,” she said.
The plan while laudable is very ambitious given the historical progress made in achieving financial inclusion as well as the current economic situation. Typically a slowdown in the economy results in more people being financially excluded ‘