Beneath Nigeria’s vibrant marketplaces, women micro-entrepreneurs navigate a complex financial landscape. 70% of trading in Nigerian markets is carried out by women (IFC), but despite their significant economic contributions, these women remain underappreciated, often overlooked by financial institutions—at their own risk.
In 2022, Women’s World Banking collaborated with three Nigerian banks to launch a savings product with optional credit for low-income women. One bank focused on encouraging women to save small amounts over three or six months, offering credit support afterward. Throughout the initiative, the undeniable economic power of these women came to the forefront. Nigeria’s informal economy is a powerhouse that accounts for an estimated 58% of GDP (IMF), and Nigeria’s GDP could increase by USD 229 billion if women were able to participate in the economy at a level commensurate of men.
Through surveys and interviews across Nigeria’s five geopolitical zones, Women’s World Banking gathered valuable insights for financial services providers to better address the needs of these women and promote financial inclusion.
Our analysis provides a nuanced understanding of the realities and challenges they face, and highlights several key insights:
Nigerian women micro-entrepreneurs face barriers to financial services access and usage: These include high costs, aggressive collection methods, technical difficulties, cultural and religious constraints, lack of product awareness, complexity of loan applications, and fear of stigma associated with defaults.
Women who access financial products attest to their impact: Savings accounts are valued for their security, loans facilitate business expansion, and digital solutions increase accessibility. However, challenges include varying levels of enthusiasm and gaps in customer support.
Financial practices vary by geography: Savings are common in Nigeria, although habits vary by region. For example, women in Lagos are frequent savers, while budgeting is popular in Enugu.
Women use a diversity of coping mechanisms to manage shocks: Those include personal savings, informal loans, and digital financial tools. Still, better support is needed to offset financial challenges.
Women prioritize savings and financial management: Daily savings, community support, and cautious loan borrowing are common, but regional differences exist in financial education, engagement, and management.
For a range of reasons, women prefer informal financial products: Community savings groups (esusu) and thrift savings are perceived to offer more reliability, flexibility, alignment with values, and support than formal financial services such as savings accounts and loans.
These findings highlight the necessity of addressing the specific needs and challenges faced by women micro-entrepreneurs. Tailoring financial services to their needs, enhancing financial education, improving accessibility, and respecting cultural and religious values are essential steps toward empowering these entrepreneurs and supporting their financial stability and business growth.
