How Banks are Driving the Financial Inclusion of Women

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BETA has helped me in many ways and I have introduced at least three people to the plan. Those three people have in turn introduced more people to the plan and the number continues to grow. I have actually lost count of the number of people that have been introduced to the plan from my network. Even my Sales Assistant indicated interest to join and I told her that even if she might not be able to meet up with the regular payments, she can still structure a plan which will still see her save comfortably. I encourage people to save with BETA because I have gained from the package and I know a lot of people that have also gained from it.” Above is the testimony of Mrs. Animasaun, a trader who suffered financial exclusion but through the rigorous efforts of Diamond Bank Plc is now enjoying the benefits of financial inclusion, writes Adedayo Adejobi
When the Central Bank of Nigeria launched its national financial inclusion strategy, it cited research from EFina that 36.9 million Nigerians are unbanked, majority of whom are women. Women, especially in Nigeria, want access to a bank account and a safe place to keep their money, but physical proximity to a branch, lack of trust, financial literacy, affordability and eligibility remain real obstacles.
Financial inclusion is increasingly recognised as a critical part of the global agenda to reduce poverty and boost prosperity. The World Bank and partners issued commitments to advance financial inclusion and achieve “Universal Financial Access” by 2020. Access to financial services is a critical enabler in several of the United Nations Sustainable Development Goals (SDGs). Advancing financial inclusion is a priority for the government of Nigeria where we are seeing meaningful policy change under the 2012 National Financial Inclusion Strategy.
These goals are yielding promising returns as the number of people worldwide with a bank account grew 700 million between 2011 and 2014 according to the World Bank’s Global Findex report. However, the gender gap persists as women in developing countries are nine percentage points less likely to have a bank account.  In Nigeria, where nearly 73 per cent of all women are unbanked, the gap is even wider having increased from 7.3 per cent to 20.7 per cent between 2011 and 2014.
While the inequality is frustrating, it is also ironic, as research tells us that women are naturally better savers—especially in Nigeria where women set aside up to 60 per cent of their earnings. Women are more loyal customers, less likely to default on loans, and more likely to take advantage of multiple financial products. More importantly, women with financial access invest in their children’s education, better healthcare for their families and better housing.
“Establishing a financial inclusion division was not driven by a philanthropic mindset but with focus on serving low-income segment (especially women). This is an important part of our growth strategy. As a leading retail bank, when you see that many millions of people, you see a great opportunity to bank new customers” says Kayode Olubiyi, Financial Inclusion Divisional Head at Diamond Bank Plc.
And that is why despite an impending economic crisis in the country, Diamond Bank is full steam ahead with its financial inclusion activities, launching its agent banking product Diamond Closa in August 2016, as well as planned rollout of KWIK Loan, a short-term, instant approval loan program based on the clients’ savings history.
Diamond Bank has been in the innovation business for many years. Apart from the only bank in the region with an explicit business line dedicated to the low-income segment, Diamond also pioneered the use of Mobile Banking App in Nigeria, 1st Bank to implement Mobile App Fingerprint technology in Africa, 8th in the entire world. So when the Central Bank set out its national strategy to bring more people into the formal financial sector in 2012, Diamond Bank was quick to recognize, and act on, the opportunity not just to expand their client base, but to be part of the national financial inclusion success story by being the bank that empowers low-income Nigerians.
Where is the good place to start? In many ways, the answer was sitting in front Diamond Bank branches all over the country: women in the marketplace. “In Nigeria, any time you see a market, there will be a lot of women there,” according to Mr. Olubiyi. The fact that women also made up the majority of the unbanked segment made it an easy decision with the bank to start their financial inclusion activities with women. It was at this time that Diamond Bank partnered with Women’s World Banking to develop BETA, a savings account that can be opened in less than five minutes and has no minimum balance and no fees. BETA was also designed as a convenient and accessible product to the market women — agents known as BETA Friends visit the customers at their stalls in the market to open accounts and process transactions (deposits, withdrawals, Bills Payment, etc.) using a mobile phone application.
The product (solely driven using Digital Financial Services platform) was a tremendous success: more than 35,000 accounts were opened in the first six months alone, 40% by women. Nearly three-quarters of the accounts were being used on a regular basis. And this was only the beginning. Once the market women had access to a convenient savings account, they wanted more. According to Mr. Olubiyi, “We started hearing from our clients that they wanted a way to save for a specific goal like her child birth, child’s education, wedding, etc. Some had already started using the BETA Savings account like a current account and wanted another type of savings account, hence the introduction of the BETA Target Savers account.”
Since then, Diamond Bank, together with Women’s World Banking has been building a robust and diverse set of product offerings to meet this segment’s growing financial needs. “After Target Savers, the same clients asked us, ‘don’t you have a loan product where you can give us credit or a small loan to expand a business or add a second shop?’ So we worked with Women’s World Banking to devise a way to use the client’s BETA savings history as a way to give them a credit score. The results of the pilot were profound; 100% repayment rate on the loans given out. We are getting ready to go live with this to extend credit as much as possible to this segment.”
Diamond Closa is the bank’s most recent initiative aimed at providing affordable and convenient products and services to the un(der)banked segment of the society. Diamond Closa is a network of fixed agent locations attached to existing businesses in the community. “With Diamond Closa, we are making sure that a Diamond Bank client can take care of their financial needs, wherever they are.” And with introduction of Diamond Y’ello, a hybrid mobile savings account offered in partnership with MTN which affords customers a blend of banking services and telco benefits, Diamond customers can transact wherever and whenever they want.
“Our idea is to truly position financial inclusion as a real business,” revealed Mr. Olubiyi. The tough economic conditions facing Nigeria is actually proving this case: “at the end of the second quarter (2016), BETA accounts recorded a highest deposit volume since the launch of the product”. Mr. Olubiyi surmises this is because the downturn has hit salary earners harder, while the basic economy of the low-income market endures. We had grown by more than 120,000 customers on BETA with deposit base growth from N3 billion to N4.5 billion; while Diamond Y’ello customers now about 7million with over 1million active.”
Mr. Olubiyi is thoughtful as he reflects on how far Diamond Bank has invested in financial inclusion. It is perhaps fitting that the head of this dynamic, growing division came from information technology, another industry used to ongoing change. “Financial inclusion thrives mostly with collaborative effort, and we will keep on investing in this with our partners, Women’s World Banking, MTN, EFina and The Gates Foundation who have been key drivers in our success story. We want to build a platform to serve all customers in the society by making Diamond Bank the Bank for Everyone”.