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Gender parity: the missing link in financial inclusion?

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Nigeria has the highest number of adult individuals in sub-Saharan Africa, without active accounts in any financial institution, according to the World Bank Global Findex released in 2018. By December, 2017 only 39.1 percent of the entire population has access to an account, representing a significant drop from 44.4 percent recorded in 2014.

The report goes on to show that within the population that has opened an account, between 10 to 20 percent has never used their accounts for any transaction.

While there are various reasons that could be blamed for the reversed progress Nigeria is making, despite accelerated investments in financial inclusion initiatives, the inability of players to address gender exclusion in financial services has been proffered as a major missing link.

To understand the gender gap, 51 percent of men own an account in Nigeria compared to 27 percent of women in 2017. What that means is that nearly twice as many men as women in Nigeria have accounts. The gap got bigger in 2017 than it was in 2014 and 2011.

In 2011 and 2014, the amount of women that have accounts were at 26 percent and 34 percent compared to the men which had 33 percent and 54 percent respectively.

“Having access to financial services is a critical step towards reducing both poverty and inequality, and new data on mobile phone ownership and internet access show unprecedented opportunities to use technology to achieve universal financial inclusion,” Jim Yong Kim, President of the World Bank said.

Analysts at Centre for Financial Inclusion (CFI) note that women face multiple barriers which would require multi-faceted strategies in a range of development areas to overcome the disparities.

“Nigeria is the only sizeable country in Africa that has not cracked the mobile account nut,” CFI stated. “Mobile accounts have in fact backtracked slightly. The 6 percent of people with mobile accounts is well below 21 percent average for the sub-Saharan Africa region.”

The gender gap for access to financial services has grown significantly from 2011 when it was 7.3 percent to 2014 where it rose to 20.3 percent and rising again to 24.1 percent in 2017.

“Nigeria today is one of the largest countries in the world with such a significant gender gap,” CFI analysts said.

Barriers to financial inclusion according to the Central Bank of Nigeria (CBN) include unemployment and irregular income; expensive financial services; financial illiteracy and lack of trust; lack of identification requirements; and limited physical access (access points are too far away and transport costs too high).

Increase in financial inclusion for women can lead to higher economic growth as well as lower income inequality. Studies have also shown that access to savings accounts not only increased savings but also help improve women’s investment and decision making power in the household.

The CBN and other agencies are already responding to the challenge. The CBN for instance, developed a National Financial Inclusion Strategy on October, 2012 aimed at reducing the exclusion rate to 20 percent by 2020. Specifically, adult Nigerians with access to payment services is to increase from 21.6 percent from 21.6 percent in 2010 to 70 percent in 2020, while those with access to savings should increase from 24.0 percent to 60 percent. The credit is expected to increase from 2 percent to 40 percent, insurance from 1 percent to 40 percent and pensions from 5 percent to 40 percent, within the same period.

The concern however, is that actors driving the strategy appear to see it as a project for profit in the short term. This partly accounts for the low growth the strategy has seen six years after. At a recent technology conference organised by Techpoint Nigeria, experts noted that overcoming the financial inclusion challenge requires a lot of financial and social investments. Initiatives aimed at increasing financial access must be planned for the long term.

The post Gender parity: the missing link in financial inclusion? appeared first on BusinessDay : News you can trust.

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