This post is co-authored by Becky Allen, a research associate in the Women and Foreign Policy program at the Council on Foreign Relations.
Nigeria has been identified as one of eleven emerging economies with high growth potential for the coming decades. And yet, Nigeria is far from achieving the World Bank’s goal of universal financial access by 2020, with women comprising the majority of Nigeria’s “unbanked.” Only one-third of Nigerian women own a bank account, compared with more than half of Nigerian men, a stubborn gender gap that has grown, not shrunk, in recent years, from 7 percent in 2011 to 21 percent in 2014.
Factors preventing women from opening bank accounts in emerging economies – such as Nigeria – include the inability to travel to bank branches, limited financial literacy, and inadequate proof of identification. Ironically, however, evidence suggests that women default less frequently on loans and invest more in their families compared to their male counterparts.
In an effort to reverse the growing gender gap among Nigeria’s unbanked, the private and public sectors have begun to harness digital technology to overcome the barriers preventing Nigerian women from opening bank accounts.
One such innovative financing tool is the digital BETA savings account. Launched by Diamond Bank in partnership with Women’s World Banking in 2013, BETA savings accounts relieve customers of needing to go to a physical bank branch to open and operate an account. Rather, “BETA Friends” – female bank agents – attend open-air markets with mobile devices, enabling women to setup accounts and make deposits and withdrawals without having to leave their stalls.
Significantly, women can open BETA savings accounts without documentation or minimum balance requirements thanks to Nigeria’s tiered Know Your Customer Requirements (KYC), which enables Diamond Bank to open low-value accounts with basic personal information. Since its launch, BETA has reached more than 275, 000 clients.
Following the success of BETA, Diamond Bank launched BETA Target Savers Accounts – another innovative digital product designed to increase women’s financial inclusion. These accounts enable women to save for specific goals, such as financing child birth or a child’s education, likewise employing BETA Friends to facilitate the process for women. Diamond Bank also permits women to take out loans without having to provide collateral through the BETA Kwik Loan, a service that operates via BETA technology.
Earlier this year, yet another mobile money platform launched to enable women in rural Nigeria to transfer money to one another. This product, the result of a partnership between the nonprofit financial platform Stellar and the fintech service provider Oradian, aims to replace less secure cash transfers (often conducted by a third party individual traveling from one area to another) with mobile money transfers.
Most recently, UN Women partnered with the Zamani Foundation, MasterCard, and the National Identity Management Commission to launch the “One Woman, One ID Card” initiative in Nigeria. The project seeks to reduce the number of women without a form of personal identification and to provide women with finance and business training. Within the project’s pilot phase in Kaduna State, five thousand women are expected to benefit, and in total, the initiative is expected to impact 500,000 Nigerian women.
According to UN Women representative Adjaratou Ndiaye, 70 percent of Nigerians living below the poverty line – the majority of whom are women – could benefit from increased financial inclusion in the country. Perhaps with the onset of these new technologies targeted at women, Nigeria can narrow, or even close, its banking gap and achieve the 2020 goal of universal financial access.