Onyeka Akpaida, founder/chief impact officer of Rendra Foundation, is a women empowerment advocate with 11 years of experience in female financial and digital inclusion, financial services, social protection, advocacy, government relations and consumer-centric digital banking in a top tier leading international bank. In this interview with Chuks Oluigbo, Akpaida speaks on the benefits of building a savings culture, especially by women, the challenges, and incentives to encourage and support more individuals at the bottom of the pyramid to adopt healthy saving habits to boost their resilience, among others.
Please tell us about the activities of the Rendra Foundation.
I am passionate about deepening financial inclusion among low-income women and advocating for them to live in a dignified way with better living conditions. I founded Rendra Foundation to serve as a platform to further this goal and till date, the foundation has been promoting, advocating for and educating low-income and forcibly displaced women in the Northern region of Nigeria on inclusive finance. Through my work in the private sector and at the Rendra foundation, I have empowered over 2,000 women in Northern Nigeria to grow their businesses, have access to finance and become financially included. Leading my team at the Rendra Foundation, we launched the first-of-its-kind Microcredit Scheme for Internally Displaced Women in Northern Nigeria as a response to the COVID-19 pandemic. We were able to help these women restart their microenterprises which went under as a result of the lockdown measures put in place to curb the spread of the pandemic. The foundation has scaled this scheme to empower other low-income women living in rural communities in Northern Nigeria.
My greatest desire is to see an inclusive Africa where women are encouraged to be economically empowered and become all they desire to be.
Many low-income earners complain they are barely able to survive, how realistic is it to then expect these same people to build a savings culture and how are the public and private sectors making it easier to do this?
Many Nigerians are living from hand to mouth because their daily income is barely sufficient to meet any more needs beyond their immediate requirements for food while accessing other basic living requirements like health care, education, safe water, clothing, housing is often unbearable. According to EFInA’s financial access survey, savings through a combination of formal and informal means formed a key solution to some of the liquidity issues experienced by 16 percent of the respondents. While this represents a small percentage of the entire population, it still served as an important lifeline for groups who would have otherwise become stranded.
On the surface, it seems near impossible to expect a person or a family in such a situation to still save something out of insufficient funds. However, savings remains a very key requirement of resilience, a way to grow wealth and achieve future financial goals. Even in a dire situation a lot of vulnerable people still find ways to save, and they do this through informal solutions like ajo, under the pillow, cooperative societies and so on.
Read also: Who are you? The gendered nature of the identity conundrum
Low-income people or people operating at the bottom of the pyramid favour informal saving solutions because formal solutions either do not meet their requirements or do not take their peculiarities into consideration. While informal means of savings are more flexible and accessible to vulnerable groups, there are associated risks. For instance, with savings groups or ajo, the funds are usually kept by a custodian in their homes thereby exposing the monies to theft, destruction through flood and fire hazards. On the other hand, there is also the risk of a default by members who then become inaccessible.
Formal savings solutions that serve vulnerable groups exist, but they are few, have very limited reach in rural areas, there is inadequate information of their existence among vulnerable groups, a lack of access due to requirements that serve as barriers and the issue of trust in service providers – all of which must be addressed in order to encourage a savings culture.
The year 2020 presented very harsh conditions for everyone and more so vulnerable groups, what are some of the challenges your beneficiaries recorded?
The spread of the pandemic and the ensuing lockdown across the country without proper or sufficient arrangements to cater for vulnerable citizens dealt a major blow on the living conditions of the women of Rendra Foundation. Income levels dropped or were completely lost because restricted movement meant reduced to no customer patronage. This made it harder to afford basic living essentials like food, electricity, healthcare, water, thereby negatively affecting overall life satisfaction at the time. Businesses closed down for several reasons while others lost their jobs. For example, beneficiaries whose businesses involved perishable food sale lost goods to spoilage and had insufficient funds to restock while others had to sell on credit. The hard times presented by the pandemic also resulted in gender-based violence in homes, reports of robberies and increased stress levels from losses recorded and lack of funds. The education of the children of our beneficiaries was affected. The lockdown and restricted movement meant that children could not go to school and many could not afford the technology (phones, laptops, tablets) required to participate in remote or online learning.
At Rendra foundation we designed solutions to support our women beyond providing food items. We launched our IDP Women microcredit scheme to help forcibly displaced women restart their businesses after the lockdown. The support and incentives delivered by the government also came with its challenges including poor targeting – palliatives did not reach those who really needed them in all cases and a lack of identity also limited access to many of the government-led interventions.
In what ways would savings have alleviated some of these challenges?
Having funds to fall back on when a person faces financial hardship will go a long way in alleviating challenges and providing a means through which an individual or families can survive. Savings will provide a means through which vulnerable groups can meet immediate and essential needs (food, electricity, water, rents, healthcare, etc), or even a means to sustain or restart a business. It will also limit the effect of challenges faced on the physical and mental well-being of vulnerable groups. Knowing that rainy-day funds exist means that these groups can rest easy knowing that there is something they can rely on.
Developing a savings culture holds numerous benefits especially when shocks hit. But according to EFInA Nigeria survey, only less than half of the population (32 percent) have used savings-related products in the past 12 months. What are the barriers to savings in general and to formalized savings in particular?
Access to any type of financial product and service has over the years been the ultimate barrier for many low-income and vulnerable Nigerians, and this is applicable to savings. Most of the solutions that exist under the formal setting are not easily accessible or affordable for these groups. There is also a lack of trust in formal institutions because of past personal or retold experiences of losses, a system that is constantly after profits and lacks or ignores the peculiarities of vulnerable groups. Hence, they would rather use a system, informal means, that they trust because it is being handled by someone they know, offers them flexible requirements and if it is under-the-pillow type of savings, they can see and feel their money whenever they want just as an assurance that the money is safe.
Inadequate income or unstable income, lack of access or information about existing savings programmes, limited financial knowledge and feelings of discouragement following events that disrupt savings, i.e., loss of funds through fraud are other barriers that prevent savings.
What incentives will you recommend to encourage and support more individuals at the bottom of the pyramid to adopt healthy saving habits to boost their resilience?
It will be interesting to see solutions that mimic and leverage the design and essence of existing informal savings methods with added security. This way, individuals at the bottom of the pyramid will be drawn to embrace savings solutions because it resembles what they are used to. Delivering educational and awareness-raising programmes to build and deepen foundational savings knowledge. Where the knowledge is non-existent, these programmes will be useful to instil required skills. It will also be helpful to provide jobs and deliver skills that can be utilized by vulnerable groups to generate income. In the same vein, the government must ensure that it creates an enabling environment and reform policies, tariffs, taxes that do not support business growth at the bottom of the pyramid. An entry point can also be through women. They are primary decision-makers in the home and can influence members of their families and households to build or deepen savings cultures.
We know that women are one of the most financially excluded and are critical to driving resilience and savings culture in the home. In your experience, how can products be designed to improve savings among women?
Solutions need to go beyond packing in perceived feminine colours and female faces to solutions that address existing gender imbalances, discrimination, social norms and cultures. A one-size-fits-all solution will not be optimal because women in different stages of life have different financial and savings needs. The savings needs of a widowed woman will be different from that of a married woman with five children, divorced or single woman.
It is a good thing that the Central Bank of Nigeria has launched a framework that applies a gender lens to bridge the financial inclusion gap among women. The eight strategic imperatives identified, including designing digital solutions specifically targeted at women, female-led solutions and delivery to bridge cultural requirements that prevent vulnerable women from dealing facilities delivered by men, solutions for low-income women, financial and digital literacy, amongst others, form the basis that will drive and deepen a savings culture amongst women.
While these solutions are steps in the right direction, what is most important is implementation. We need to see more innovative products and services that have started to deliver solutions with these as a guide.
How important is developing a savings culture to deepening resilience for vulnerable groups and how will it benefit immediate communities and the economy?
Resilience is the ability of a community or an individual to cope with and quickly recover from a crisis and this is often determined by several factors including infrastructure, access to financial resources/services/products, physical and emotional support available. For vulnerable groups, we find that they are less able to deal with shocks or crises because they lack access to many of the facilities like financial services and products that aid resilience and are unserved or underserved by public and private basic amenities providers. Access to financial services provides the opportunity for vulnerable groups to start a business to create a source of income and part of this income can be saved to meet needs when crises or liquidity issues arrive. When crises happen, as we have identified earlier people lose their income but having funds set aside can provide a soft landing for anyone, especially vulnerable groups. Savings provides a means through which vulnerable groups can sustain or restart their businesses. This will support the economy and immediate communities in the sense that those businesses can continue to operate, create income for the country and jobs for citizens who have lost their incomes, who can, in turn, save up to start their own businesses and access the same benefits for themselves and the economy.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
