98% of Nigerian women left out of formal credit markets

98% of Nigerian women left out of formal credit markets

About 98 per cent of Nigerian women are left out of formal credit markets, unable to obtain loans from formal financial institutions like banks, a new report has said.

Only about 45 per cent of adult Nigerians borrow at all from the formal sector, said the report by the Rockefeller Philanthropy Advisor’s Gender Centre of Excellence –a centre established to be a resource centre and knowledge hub on advancing women’s financial inclusion in Nigeria.

Low education, limited decision-making power, and being in a rural area exacerbates these issues and expose women to financial limitations, it said.

The GCE supports efforts to enhance the capacity of the Nigerian financial inclusion ecosystem to design, implement and sustain policies, products and services that are gender-responsive. It also works on initiatives that serve the needs of the unbanked or underbanked populations, particularly low-income women.

The aim of the study was to explore the gender differences in women’s access to credit services in Nigeria and identify potential opportunities to increase women’s access to these services.

Data used for the analysis were drawn from years of lending data from banks, held by the Central Bank of Nigeria-licenced Credit Registry, as well as survey data by the Enhancing Financial Innovation and Access (EFInA).

Trust Deficit

The analysis found that 98 per cent of Nigerian women were left out of the formal credit market, and found that only 45 per cent of adult Nigerians borrow at all, ostensibly because many informal borrowers lack trust in formal institutions, are not aware of credit products at-market, or believe they lack the qualifications for a loan.

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The study also found that young women aged between 18 and 25 performed better than their male counterparts on a variety of indicators, including account activity, and borrowing.

“These women will benefit from more complex financial products that can encourage them to plan for future financial health,” it said.


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“These women require more time to become comfortable with financial products. As such, bundling services with existing platforms like mobile banking and savings groups can address on-boarding challenges.”

The report also found that gender norms and household dynamics can shape women’s access to finance.

Not Getting Loans

The analysis reflects experiences shared by women farmers with PREMIUM TIMES about their difficulty in getting credit from formal sources such as banks.

Elizabeth Onyeri, a maize farmer in Pegi, a community in Abuja, said in 2021 after she could not secure the CBN-backed NIRSAL loan for farmers, she got a professional auditor to audit her farm, preparatory to submit a stronger application. She was still not given credit.

When she went to a commercial bank, she was turned down too, because of her low account balance.

“I went to Access Bank last year to ask a question about the loan but I was told I wasn’t qualified due to my account balance,” she said.

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“The banker told me to come back a few months later but I already lost interest,” she said.

Another farmer, Dunmola Sodeke, who owns Omodun farms in Lagos, said despite multiple attempts, she too could not get credit. She started her business using personal savings, and support from her father.

Policy Direction

Access to credit is considered a key element and indicator of financial inclusion, which Nigeria has struggled for years to improve.

A study in 2008 by EFInA, a development finance organisation, revealed that about 53.0 per cent of adults were excluded from financial services. By 2010, efforts to deepen financial inclusion as a vehicle for economic development improved in Nigeria as the exclusion rate reduced to 46.3 per cent.

In 20212, the Central Bank of Nigeria launched the National Financial Inclusion Strategy aimed at further reducing the exclusion rate to 20 per cent by 2020.

The bank outlined its targets to include: adult Nigerians with access to payment services increasing from 21.6% in 2010 to 70% in 2020, while those with access to savings should increase from 24.0% to 60%; and Credit from 2% to 40%, Insurance from1% to 40% and Pensions from 5% to 40%, within the same period.

In 2020, the target was not achieved as only 67.5 million of the 105.5 million adult population were financially included in the year, meaning only 64 per cent were included by the end of the year from 63.2 percent in 2018, representing a marginal growth of 0.9 percent.

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Some of the challenges identified included lack of required documentation, low levels of financial literacy, lack of close-proximity service points, high service fees, opposition from banks, technology-related challenges, among others.

The new report by Rockefeller Philanthropy Advisor’s Gender Centre of Excellence said financial service providers need to make the case for why credit is an important part of financial health and resilience.


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