Seth Usanga, founder at Padimi, a fintech company that provides social security through subscription-based payment for healthcare and micro-insurance, acknowledges the barriers faced by players in the informal sector including illiteracy and stereotypes.
In this interview with David Ijaseun, Usanga, discusses strategies to increase financial inclusion of underserved women entrepreneurs in the country, emphasising the role of increasing financial literacy and awareness in overcoming these challenges.
Excerpts:
What specific challenges do women face in accessing financial services in Nigeria, and how can these be overcome?
The challenges women face in the financial ecosystem range from illiteracy to stereotype barriers. However, these obstacles are gradually decreasing due to higher education and informal training from various organizations. The gender-based limitations that once existed are also being broken down, and women are making remarkable achievements.
How does the Nigerian government and financial institutions ensure that the informal sector has access to financial education and resources?
The Nigerian government and private individuals are increasing efforts towards financial inclusion, particularly for women at both grassroots and higher levels. Programs from various sectors, including the Bank of Industry and Lagos State Entrepreneurship Trust Fund, have been set up to empower women.
Nowadays, you are having incubators that are looking for more inclusive women participation for higher level business and Innovation. I believe that the state government, the federal government, and even private individuals are doing a lot to step up the participation and inclusion for women into the financial services market.
They also ensure that there is a lot of advocacy going into these informal sectors. I have seen cases where information is written in the local dialect just so that more people are able to read and catch up with what’s happening.
You have a lot of boot camps going up and about to ensure that the informal sector is also included in this, and with the likes of agency banking spreading across you have more people getting access to financial education and resources
As a financial enterprise, how are you contributing to making underserved communities financially inclusive?
As a social and financial enterprise, we are making waves on our own bit to bring people into the fold. We have programs that we have done in terms of mini-consultancy that we give to people on our platform.
We provide business development services for them, we also enlighten them on how to participate in opportunities like when the government is providing some type of grant or funding for specific projects or helping people apply for just general funding.
Basically, we are also doing our part by trying to contribute and trying to promote financial inclusion for the underserved in our community as best as we can.
We have broken different products down to such a level that it should be easy to have, like plug and play. We take away the harder stuff that they will not understand and we simplify it for them to help them understand it and also see the benefits of having those things at their disposal.
How do you ensure that your products and services are designed to meet the unique needs of Small and Medium-sized enterprises in Nigeria (SMEs)?
So our products are customer-centric in the sense that they’re products that people actually need. They were designed with the users from the beginning so it’s not that we made a product and went to look for users.
We have identified user problems, created solutions, and simplified our products for easy access. Our user-friendly products require only basic personal information to provide inclusive healthcare, insurance, or financial services.
How do cultural and societal factors affect women’s participation in financial activities in the country, and what can be done to address them?
In terms of cultural and social factors, barriers affecting women are gradually being broken down. More women are running small and informal businesses than men, particularly in certain parts of Nigeria.
To improve the situation, literacy programs and workshops that teach business skills, such as registering a business name and saving money, need to be made available. This will provide more opportunities for women to participate and improve their businesses.
What roles do microfinance institutions and community-based organizations play in promoting women’s financial inclusion and how can they be better at it?
Microfinance institutions and banks are critical players in empowering women at the grassroots level as they are the closest financial institutions to this set of entrepreneurs.
With the right support and government regulations, these organizations can have a positive impact by providing training and access to capital. However, they need more support to widen their reach and perform better.
They need encouragement and also need regulations from the government to ensure that the environment is more enabling for them; in terms of accessing grants or capital, you need more government-led programs that can help boost these things.
What strategies have been successful in promoting women’s financial inclusion in Nigeria, and how can these be scaled up and replicated?
Female-focused strategies, such as women supporting and helping each other and organizations supporting women, have been successful. Additionally, grassroots movements have targeted specific markets with inclusive products for women, focusing on areas with high volumes of female traders.
These strategies have helped, and they’ve been able to improve and promote financial inclusion for women again. There are also other private-led programs and government-led programs that have been put in place. I think the Bank of Industry has several programs that are targeted at SMEs, Micro, Small and Medium Enterprises, and even small business owners which are targeted at women.
I believe these strategies have been successful and they’ve been able to promote inclusion for women. I think they can continue to improve and be replicated in other places. Well. I can’t really speak for other parts of Nigeria but as for Lagos and Abuja, I know that the Bank of Industry is heavy on their programming.
The Lagos State Employability Support Programme is doing its own bit to bring the people into the fold. They’re always having seminars; even down to the local government levels, you have cooperatives running programs to be able to provide inclusiveness for women as well, and I believe these measures can be replicated across board and there will be positive outcomes.
How can technology and digital financial services be leveraged to increase women-owned SMEs’ access to financial services in the country, and what are the potential risks and challenges associated with this approach?
So right now, we live in a digital age and technology is one of the biggest drivers for financial services. As long as mobile penetration continues to improve and connectivity continuously improves, there’s always going to be room for technology to play the biggest role in bringing more people to be financially inclusive.
With the fact that digitalization is happening all around, you have people setting up programs that provide digital literacy for these women and I believe that it is one of the best methods to be able to increase inclusiveness for them. Access to finance, access to literature, they’re all digital now. Everyone is using or trying to use an app to borrow either for connectivity or to sell.
Technology plays a vital role in financial services despite inherent risks, but laws and protective measures such as Know Your Customer and verification can mitigate fraud and identity theft.
Digital infrastructure capacity carries risks, but procedures exist to mitigate them. Without technology, scaling is impossible in today’s world. Also, access to literature, learning, and workshops is necessary for inclusion and participation in financial technology.
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