Onyeka Akpaida is a financial service professional with about a decade of experience in financial inclusion, consumer-centric digital banking and public sector engagement in a top tier leading International Bank. In this interview with SAMUEL ABULUDE, the founder of Rendra Foundation outlines ways to increase the financial inclusion of women in the North.
According to the Enhancing Financial Innovation & Access (EFInA) report, fintech adoption is low in the North due to illiteracy, low income and limited access to financial services.
From your experience, how can we foster the adoption of financial services amongst northern women in 2021?
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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 emphasized 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 fall out 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 in 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/Ajor” which they use for savings and accessing microcredits. Understanding their current financial and business operations which comes from close interaction with the women will help us move from merely providing a pink-coloured financial product or service to providing products and services that easily meet their needs.
Engaging local women influencers or community leaders in driving digital and financial inclusion efforts will also increase its adoption with women across the board. An ‘Influencer’ programme can be constituted and local women influencers across different touchpoints can be trained in financial literacy, digital literacy, agent banking etc using offline technology. These women upon completion of their training are incentivized to return to their communities and start driving adoption and usage of financial services by other women
Last September, the Central Bank of Nigeria (CBN) in partnership with the Financial Inclusion Special Interventions Working Group (FISIWG), Enhancing Financial Innovation and Access (EFInA) and Women’s World Banking (WWB) launched a framework for Advancing Women’s Financial Inclusion in Nigeria. In your opinion, which challenges should this framework prioritise for women-owned businesses?
The overarching vision of the framework is for Nigeria to be globally recognized, 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 4 of the 8 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%) in mobile internet users (35% of women as opposed to 50% 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. For instance, in educating low-income women who are either microentrepreneurs or are working in the informal sector, financial and digital literacy education should be simple and communicated in a local language if possible.
A Gender-considerate fintech market, which provides products aimed at financial inclusion for women. Today only 22% of Fintechs are adopting a gender-inclusive design approach to customize 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, organizations taking a gender-inclusive approach stand to benefit considerably. We launched our microcredit scheme for IDP women and so far, the women are meeting their weekly repayment with zero default recorded. A gender-inclusive fintech solution leveraging innovation to provide well-curated, affordable and relevant financial products will record good success and allow it to deliver on the promise of expanded financial inclusion by ensuring that women are not left behind.
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 personalize her repayment structure to mitigate against default. At the foundation we have women who farm or are engaged in trading grains and commodities; they buy beans, corn, ginger or pepper when the prices are low and store them with the intention to resell in a few months. 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 $3 billion in foreign direct investments.
What is your opinion on the potential of financial technology-based solutions as a catalyst to bridge the inclusion gap in general, and the gender inclusion gap in particular?
During the lockdown as a result of the COVID-19 pandemic earlier in the year, financial institutions had to leverage 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% of financial services agents. What effect if any do you think lower numbers of female agents will have on the financial inclusion gender gap and how can this gap be addressed?
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% of the customers preferred to engage with agents of the opposite gender compared to 34% 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.
It is important to understand the lifestyles of women and their families, such as recognition of childcare needs and household duties. It is also imperative to take into account the level of support they may need from male household members. In many settings, women are more likely to sign-up and become successful agents if their husbands and fathers are on-board. What this means is we need to carry the men along and sell the benefits of increased family income and living standard with the women signing up as agents.
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 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, who make up much of that economy, especially in light of high inflation rates and the recession we are now in?
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.
The Central Bank of Nigeria launched a framework for advancing financial inclusion for women this year with eight strategic imperatives being highlighted. 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 2 week or 3-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 Central Bank of Nigeria 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, in light of an unprecedented year, one that came with new learnings and experiences, and more economic and health shocks than the years before?
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. Digital financial innovation provides ample opportunity to drive access and ameliorate the barriers to women’s financial inclusion, especially in low-income communities. Women face unique barriers and challenges to accessing financial and digital products/services and financial service providers must be intentional about designing products that are inclusive, affordable and relevant in addressing the unique challenges faced by women. For instance, many women micro entrepreneurs face barriers in accessing capital to grow their businesses.
During the lockdown, the Rendra Foundation team distributed food items to 130 families at the Kuchingoro IDP Camp at FCT Abuja, and while discussing with the women, we discovered the women had micro-businesses in the Camps and required funds to restart their businesses as it was affected by the pandemic. In response to this, the Rendra Foundation launched the first-of-its-kind microcredit scheme for Internally Displaced Women, availing N20,000 to each of them to restart their business. Women often lack access to traditional collateral required by many financial institutions and also face obstacles in building a credit history. This can easily be solved through digital finance as fintech companies have the opportunity to leverage technology and data to develop alternative credit scoring models such as using savings behaviour, behavioural or transaction data from their mobile network or transaction data from sales to determine creditworthiness outside of traditional collateral to provide women with access to financing. Insurance has become a necessity and we should be innovative in delivering micro-insurance products to women.
This would mean rather than looking for a plan that covers all aspects, we can start with a plan that addresses critical health challenges experienced by women and their dependents; like malaria or childbirth insurance. Adopting this approach will increase the participation of women in microinsurance and move them from access to the usage of financial services. Finally, I would like to emphasize the need to collaborate and limit working in silos especially for us working with low-income women, so we can have a greater impact and create sustainable changes for the people we serve.
Source : From the Web