What women (at the bottom of the pyramid) want – and need
The inability to access finance is one of the biggest challenges facing women in Nigeria, but the women at the bottom of the pyramid have even greater odds stacked against them: little to vocational skills and financial literacy.
Temitope had never even walked into a bank before she found herself in debt. With limited education and no income, she decided to start her own cooking business. She rented a stall on a payment plan, bought a gas cooker, and some ingredients, and got to work. However, her cooking skills were limited, and so she never acquired a solid customer base. I met her late last year in dire straits: the bank who loaned her money had come knocking. Tope’s story is unusual, in that most other women like her, do not even have access to credit facilities to set up or expand their own businesses. What’s not at all unusual, is that, often, financial systems do not take the time to fully understand what these most vulnerable of their customers need. If they did, Tope would have understood the fundamental flaw in her business plan- selling cooked food without the ability to create the kind of tasty dishes that rewards one with loyal customers.
Women with little or no income often lack the skills to generate sufficient income; which limits their ability to save and further compounds the problem of a lack of credit history. They are then unable to access the required credit to expand their businesses or to create their own income-generating businesses in the first place. According to the 2018 EFInA report, 32 per cent of women lack the product and service knowledge with which to evaluate financial services. Empowering them must go beyond giving them access to a bank account, or seed loans. It is significant, but ultimately not enough, to open up access to credit for underserved women.
Over the past two decades, our nation’s financial systems have made significant strides: with new strategies and substantive investments in innovation. Banks, financial technology companies, and a number of other financial service delivery organisations have made some headway in making banking processes easier, providing value-added services, and driving participation for Nigerians. Despite these advancements in the financial sector, we still have too many Temitopes and have to question why the impact of so much activity is not being felt by the very people who need it most.
Put simply; the credit gap is worsened by the alarming skills gap. Over 76 million Nigerians are illiterate and lack the basic skills for modern living — and the majority of them are women. The skills/knowledge gap is central to the inability of these women to generate an income. Beyond that, however, the barrier extends to their incapacity to make informed decisions — given the increasing complexity of financial products and services out there. As such, country-level inclusion strategies that do not incorporate measures to increase financial literacy or skills acquisition, are doomed to realise sluggish gains, if at all.
The bottom line is this: in order to meet anyone’s needs, you must first understand it. Blanket structures no longer work. While many financial service providers are beginning to understand this and sponsor skills trainings, the work being done falls far too short of what is required to make a dent. Adequate educational/vocational training remains a lever for increasing women’s participation in the economy; that we have yet to pull.
Not every industrious woman at the bottom of the pyramid qualifies for credit structures and many who do are likely to be further hindered by the lack of functional skills or by financial illiteracy. As we search for sustainable approaches to resolving the challenges posed by financial exclusion; we must be clear that there are no easy answers — nor is there even a single answer. Skills training, improved savings habits, improved financial literacy are only a few key stepping stones for beginning to better the economic outcomes of our most marginalised women.
From the work that my organisation, MamaMoni, has done, I have seen first-hand and repeatedly, how focused skills development efforts have enabled economically marginalised women to develop ideas, start new businesses, expand, and provide for their families in previously unimagined ways. Within a year and a half of participating in holistic skills development activities; Chinasa, in Oriade LCDA went from sitting idly at home, to baking her own bread rolls and selling to other women in the community. We got her to understand that she needed to manage her funds and save in a more intentional manner. She soon qualified for more targeted credit; was able to rent a larger space; expand her business and begin training other women in different communities. In this instance, skills acquisition and an understanding of the need to establish a history of saving, magnified the impact of access to credit.
I have heard some women refer to credit offered by financial institutions as ‘juju money’. The lack of trust these women have, highlights the complexity facing financial literacy efforts. Intensive and ongoing engagement methods are a necessity to effectively relate with, and gain a firm grasp of their current situations, ambitions, and desires. Identifying the nuances at the bottom of the pyramid is not an easy feat, but it is possible. The use of agent networks and strategic partnerships with on-the-ground establishments can bridge the gap between financial institutions and these potential customers. Similar observations and references were also made during the discussions at the recently held Lagos Business School Financial Inclusion Conference.
The route out of poverty for women is not always more capital, but rather, inclusion at this more basic level, which enhances women’s ability to manage those financial resources that are already accessible. The most financially vulnerable women in our society just want to survive. One major way to ensure this is to ensure that they have the requisite basic skills and knowledge to earn a living, and the confidence in their own abilities to seek out support.
There is no denying the exponential impact that comes from empowering women and creating a sustainable ‘femeconomy’ – the evidence shows that financial products that come with additional services—technical training, awareness-building, warehousing services for farmers, market information, etc.—create better outcomes for customers than financial products alone. In Burkina Faso, for example, a women’s savings group that provided an integrated package of financial services and women’s empowerment programming found that there was a 9percent increase in the quality of work that they did and a 12percent increase in the women’s savings.
In a country where the basic dignity of our most marginalised citizens is neglected, we often forget that women tend to spend disproportionately more on the feeding, education and health care of their families – the kinds of expenditure that have a significant inter-generational impact. Beyond that, there is an even greater untapped economic potential that these women bring to their wider communities; in the form of increased contributions as literate economic actors.
Nkem Okocha is the founder of Mamamoni – a social enterprise which provides loans to low-income women from rural and urban areas, who were unable to secure funds from financial institutions, and organises vocational skills programmes for women to help them start businesses.