Lenders push for women banking on back of low risk, high integrity

Low risk of default and perceived judicious use of facilities by womenfolk, among others may have engendered the sudden push for women banking by lenders in the country, BusinessDay investigations have shown.

Also, banks exploring ways of tapping into earmarked local and foreign funds set aside to encourage women entrepreneurs and financial inclusion may be another incentive.

Such funds include the $7.1 million which the Financial Sector Deepening Africa (FSD Africa), EFInA’s sister organisation and a programme of the UK’s Department for International Development announced late 2013 that it will provide to Women’s World Banking, to fund a collaboration that will generate result for women, institutions that serve them and the markets they operate.

Also, 60 percent of the N220 Micro Small and Medium Enterprise (MSME) Development Fund launched last year by the Central Bank of Nigeria (CBN) has been earmarked for women.

Consequently, some industry operators told Business Day at the weekend, that the emerging entrepreneurial spirit among women in the various sectors of the economy should serve as enough encouragement to avail them the facilities.

“The only way out is to encourage them through new products and soft loans, so as to receive their patronage,” says an industry operator.

Currently women constitute 50% of the world’s population and about 50% (49.36% as at 2011) of the 170 million people in Nigeria are also women. Research has also shown that low income women are good savers but they need a safe and convenient way to save.

“Nigerian banks have realised this and are now beginning to pay more attention to their female customers,” says Chukwuka Monye, managing partner, Ciuci Consulting.

Meanwhile, 16.2 million women (38.3% of adult women) had access to formal financial services, according to EFInA Access to Financial Services in Nigeria 2012 survey.

“Nigeria needs to ensure equal participation of men and women in economic, social and political activities, to achieve the Vision 20:2020. Although financial inclusion in Nigeria is growing, inclusion for women still lags behind men. In 2012, 18.4 million women were financially excluded, versus 16.4 million men.

To close this gap, the Central Bank of Nigeria (CBN) has launched a N220 billion SMSE fund with specific focus on women, to be administered through microfinance banks owned by government and/or private organisations,” Monye further stated in an e-mailed response.    

Consequently, some banks have recently shifted focus to women banking, designing products targeted at the needs of these women.

For instance, Access Bank plc, last week officially launched ‘W’ Initiative‎, which is the bank’s approach to banking women, supported by an online interactive community dedicated to women.

Diamond Bank Plc, also recently, officially launched Diamond Woman; a proposition specifically designed to cater to the needs of women by providing lifestyle and business advisory services.

According to Monye, the CBN fund is one of many other factors that drive banks to focus on women. Although it has now increased women’s access to credit to finance their businesses, it will require banking services and tools to manage the funds.

Bolade Agbola, chairman, Chartered Institute of Bankers of Nigeria (CIBN), Lagos State Branch, said in an e-mail response that “Women in Nigeria have always been a strong component of the economy .For instance in South West Nigeria, because of abundance of land, traditionally men till the ground while women sell the produce and process the food. So women have always been entrepreneurs. It is therefore not strange that banks are focusing on women”. Another reason he said is the fact that women are more reliable to do business with, as they exhibit higher integrity when it comes to loan utilisation and repayment.

Justine Greening, UK Secretary of State for International Development, had in a report published by EFInA, said, “working in partnership with Women’s World Banking and commercial banks will allow us to provide over 1 million women across Africa with financial services they need to thrive. Investing in women is hugely powerful. We know that when a woman generates her own income, she re-invest 90 percent of it in her family and community. Women are an engine of growth and no country can fully develop unless women are economically empowered as well as men”,   

Access Bank is committed to training and mentoring women entrepreneurs to achieve  the desired business growth, which translates to greater contribution to economic development, according to Herbert Wigwe, group managing director of the bank.

HOPE MOSES-ASHIKE