Advancing Financial Inclusion for Women


Narrowing the gender gap fosters greater stability in the system, enhances economic growth and being financially included can have transformative effects for women, writes Obinna Chima

The current global fight against the COVID-19 pandemic and the need for social distancing has demonstrated that access to financial services digitally has become critical, especially for women.

As of June this year, the World Bank data indicated that 195 countries have planned, introduced or adapted 1024 safety net payments and other social protection measures for the most vulnerable populations in response to Covid-19, and an increasing number are working to shift these payments from cash to digital options.

To the Global Partnership for Financial Inclusion, women are among the traditionally excluded groups in the financial system. The organisation in its latest report stressed that women and girls globally, are among the most marginalised, earning less, saving less, and facing insecure or disappearing livelihoods in the COVID-19 pandemic.

According to the report, due to the virus, women are also facing reduced access to health care, with incidence of gender-based violence increasing exponentially.

It noted that as governments respond to and recover from COVID-19, addressing the needs of women and girls should be central to their response, even as it urged governments across the world to take steps to monitor the impact of COVID-19 on women, including specific challenges and hardships they face in the workplace, school and home, and design policy responses based on that data and related insights.

“Where women are found to be disproportionately affected by the COVID-19 pandemic, this should be reflected in prioritisation for women in policy and programmatic responses.

“This includes efforts to support women’s financial resilience as they are impacted by and recover from COVID-19 and the associated economic challenges. “Governments providing financial support to businesses impacted by COVID-19 should monitor the gender of owners to ensure that women-owned businesses have fair access to these funds,” it added.

CBN’s Framework for Women’s Financial Inclusion

In response to the challenges posed by the Covid-19, the Central Bank of Nigeria (CBN) recently unveiled its Framework for Advancing Women’s Financial Inclusion in the country.

The document was the outcome of the gender sub-committee’s work and follow-up work by the CBN and the Enhancing Financial Innovation and Access (EFInA). It builds upon the National Financial

Inclusion Strategy (Revised) (October 2018), and integrates valuable insights from the Assessment of Women’s Financial Inclusion in Nigeria (December 2019). In addition, the framework takes as an additional reference point Nigeria’s Sustainable Banking Principles, which promotes women’s economic empowerment through a gender inclusive workplace culture in business operations and seek to provide products and services designed specifically for women.

It noted that women as a critically important and distinct customer group are vulnerable and recognises the need for targeted support for women-owned MSMEs and people living in the most excluded regions (north-east and north-west).

The framework carves out the barriers of particular importance to women, laying out eight strategic imperatives for addressing barriers to financial inclusion for women.

In addition, the framework focuses on issues within the boundaries of the financial sector space, while recognising the high importance of broader economic and societal issues.

“In the short term, the focus is on women’s account ownership, with an eye on the ambitious targets for inclusion required to reduce the gender gap; in the medium- (to longer-) term, building a culture of usage of financial services by women across Nigeria in a sustainable way required to deepen financial inclusion.

“This financial-sector “perimeter” does not minimise the importance of the critically needed responses to deep-seated cultural barriers (for example, social norms, security, and safety barriers) and barriers such as low levels of education and income and other drivers of exclusion such as marital status, land rights, and location,” it stated.

Furthermore, the framework makes reference to experiences in other countries of specific relevance for Nigeria. It recognises however, that the offer of financial products and services and the status of enabling environments are in constant evolution.

It stressed that there is widespread evidence of the economic and societal benefits of women’s financial inclusion, saying that it can create greater economic stability and prosperity for women, their families, and their communities, by building assets, enabling the ability to respond to family needs, and mitigating risk.

“When a woman has access and, just as importantly, control of formal financial products she not only contributes to her own well- being, but also to the well-being of her family. When a woman saves in a safe place, she saves for her children’s education, her family’s health and their better housing –building both security and prosperity.

“With greater security and prosperity, she gains greater economic empowerment. Growing evidence from International Monetary Fund (IMF) research suggeststhat increasing women’s access to and use of financial services can have both economic and societal benefits.

“For example, in Kenya, women merchants who opened a basic bank account invested more in their businesses. Female-headed households in Nepal spent more on education after opening a savings account,” it revealed.

Bridging the Gap

The starting point for the framework was the recognition that Nigerian women are less financially included than Nigerian men and significantly so.

The gap is particularly acute in rural areas where 24 per cent of women in rural areas register ownership of formal accounts, as opposed to 54 per cent of men.

The unserved and underserved women are concentrated in the lower income segments of the population (monthly income under N40,000).

There are also significant variations among Nigerians, with the gender gap differing significantly among regions of Nigeria.

The gender differences in financial inclusion are also apparent in the types of financial services or products available in the market, with the gender gap playing out across the board.

The report showed that few Nigerians borrow from banks (1.6% of men and 1of women).
It also showed that Nigerian men are considerably more likely to save in a bank (25.8% of men; 16.3% of women), adding that women are more likely to save with informal mechanisms as only (21.9% of women, 15.1% of men).

In addition, it estimated that about twice as many men as women are likely to have a pension product (10.6% of men, 5.4% of women).

The gap continued in the realms of remittances: 26.1 per cent of men versus 18.6 per cent of women use bank services to receive remittances.

The lack of insurance products is striking across genders: only 2.4 per cent of men and one per cent of women have one or more insurance product.

“These reference points are important ways and opportunities to close specific financial inclusion gaps,” it stated.

It stressed that among other things, the focus on the framework is to be a globally recognised, increasingly inclusive financial sector that has closed the gender gap by end 2024, adding that this is to be achieved in a two-step process.

“The first milestone on this path is the reduction of the gender gap by one half by end 2021; this is the target set by members of the Alliance for Financial Inclusion (including Nigeria) under the Denarau ActionPlan5

“The second milestone is to eliminate the gender gap by end 2024.”

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 closure of the gender gap is important not only because it is part of the achievement of Nigeria’s overall financial inclusion target, but also because of the potent value proposition of women’s financial inclusion in the context of Nigeria’s economic and social development.
“The full impact of the global COVID-19 pandemic is unknown, but it will certainly affect financial systems, real economies, and entire societies.
“While it is too early to make adjustments here, the timeframe for achieving the targets may need to be re-examined in function of the impact of the pandemic over time,” it added.

Strategic Imperatives

The central bank listed some of the policies it intends to aggressively implement for greater women’s financial inclusion to include expanding the issuance of National Identity Numbers (NIN) to reach all Nigerian women, erasing the current gender gap in NIN issuance; determine less cumbersome (and safer, in the post pandemic context) processes of capturing biometrics in the field and here there is relatively greater ease of issuance of BVNs, follow this as an alternative path.

In addition, the report recommended a review of the National Financial Literacy Framework (2015) with a gender lens and to incorporate gender considerations in the rationale, vision/ mission/objectives, strategic focus, targeted segments, and implementation plan, in order to incorporate gender considerations across the framework.

Also, it recommended the development of capabilities and programs that are tied to actual, real-time transactions (offer of specific financial products and services intended to serve women), so that both clients and FSPs can see tangible benefits and results; push for FSPs to take on the responsibility for delivering these programs.

It also called for an adjustment of the regulatory framework for agent networks to ensure that women are better served by agents, via channels closer to home, review the pricing structure to strike the right balance between reducing costs for customers and providing an incentive structure that encourages the expansion of agent networks.

Some others include to promote the collection of gender disaggregated supply-side data, to underpin women’s financial inclusion efforts; complete and issue fintech guidelines taking into consideration the imperative of women’s financial inclusion; ensure approval and implement KYC tiering of payment service providers to reduce entry barriers for innovators and to facilitate the development of solutions that can benefit the underserved, especially women.

It noted that women who are financially literate have the ability to make informed financial choices regarding saving, investing, borrowing, and other financial transactions, adding that experience had shown that low-income women can manage finances capably and can take advantage of product offerings. However, the rapid development of digital financial services (DFS) brings new challenges.

“Financial knowledge is especially important in times where increasingly digital and increasingly complex financial products are offered across all income segments of the population, and at an early age.

“Linking financial and digital literacy training to the actual offer of products and studies is an effective approach to addressing customer needs.

“In Nigeria, women are currently behind men in accessing DFS. This development is a factor in slowing the closing of the gender gap, or even widening it; it is an important reason to address financial and digital literacy in ways that contribute substantially to the uptake and usage of DFS by Nigerian women.

“Gender-disaggregated data is key in bridging the financial inclusion gender gap. This requires ensuring that the financial services ‘community’ (suppliers, government, regulators and supervisors, as well as research institutions) report effectively on women’s financial activity through the establishment of gender disaggregated data.

“There are still challenges to collecting and using gender data on financial services, particularly in supply-side data from FSPs. Demand-side data from survey conducted by EFInA remains the most widely accepted data source on financial inclusion and on women’s financial inclusion more specifically,” it further recommended.

It urged stakeholders to designate ‘champions’ under the National Financial Inclusion Steering Committee, Technical Committee, and Working Group to promote and represent the Framework and to take on responsibility for implementation under each strategic imperative.


Indeed, when women actively participate in the financial system, they can better manage risk, smooth consumption in the face of shocks, or fund household expenditures like education.

Providing low income women with the right financial tools to save and borrow money, make and receive payments, and manage risk is important for women’s empowerment, but also for poverty reduction.

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.