30% of Nigerian women remain financially excluded

Looking ahead to 2024, the stage is set for a competitive and engaging year in Nigeria’s financial inclusion and digital financial services sector.?

This follows an eventful 2023, which saw several factors shaping the sector: a persistent and widening?gender gap in the access to and usage of financial services, a fast-evolving and highly competitive environment among payments players, and the increased uptake of digital lending products.

Addressing the gender gap is key to tapping the potential of women in the digital economy.?The widening gap, identified in a study?by Genesis with the Gender Centre of Excellence in collaboration with the Central Bank of Nigeria,?suggests that there is an increased need for financial products, services and initiatives targeted at meeting the needs of women.

Some progress has been made, according to data from Enhancing Financial Innovation and Access (EFInA). However, Nigeria lags behind African peers such as Ghana, Kenya, Rwanda and Uganda. The EFInA A2F 2023 survey showed that 30% of adult women were excluded from formal and informal financial services compared to 21% of men.?This means that out of the 57 million adult women in Nigeria, approximately 17 million are financially excluded.

This large segment of underserved women not only presents an opportunity for businesses, but also offers other benefits. According to an aggregate report of Alliance member data titled “The Economics of Banking on Women: 2018 Edition”, women show strong growth trends and positive performance ratios such as low non-performing loans, higher uptake of products per customer, and favourable loan-to-deposit ratios.

Genesis’ insights into financial inclusion are informed by our experience in the private sector. In 2023 we conducted numerous commercial and strategy due diligence assignments in the payments spaces.?Competition?stood out as the distinguishing factor influencing the payments sector over the last year – and with strong competition comes a greater need for differentiation, and in turn, innovation.?An example is Moniepoint, a payment acceptance player, whose market-driven innovation allows merchants to receive bank transfer payments with their POS devices.?We believe that this focus on solving the needs of specific customer groups is key to differentiating in the Nigerian market.

We look forward to these two trends coming together in 2024, with more competitors seeking opportunities by differentiating their services. Our hope is that some of?them will?tackle the persistent challenges of gender inequality and diversity.