How banks are using women’s world banking for financial inclusion of women

When the Central Bank of Nigeria launched its national financial inclusion strategy, it cited research from EFina that 36.9 million Nigerians are unbanked, majority of who are women. Women, especially in Nigeria, want access to a bank account and a safe place to keep their money, but physical proximity to a branch, lack of trust, financial literacy, affordability and eligibility remain real obstacles.

Financial inclusion is increasingly recognized as a critical part of the global agenda to reduce poverty and boost prosperity. The World Bank and partners issued commitments to advance financial inclusion and achieve “Universal Financial Access” by 2020.

However, the gender gap persists, as women in developing countries are nine percentage points less likely to have a bank account. In Nigeria, where nearly 73 per cent of all women are unbanked, the gap is even wider having increased from 7.3 percent to 20.7 percent between 2011 and 2014.

While the inequality is frustrating, it is also ironic, as research shoes that women are naturally better savers, especially in Nigeria where women set aside up to 60 per cent of their earnings. Women are more loyal customers, less likely to default on loans, and more likely to take advantage of multiple financial products. More importantly, women with financial access invest in their children’s education, better healthcare for their families and better housing.

“Establishing a financial inclusion division was not driven by a philanthropic mindset but with focus on serving low-income segment, especially women. This is an important part of our growth strategy. As a leading retail bank, when you see many millions of people, you see a great opportunity to bank new customers,” says Kayode Olubiyi, Financial Inclusion Divisional Head at Diamond Bank Plc.

And that is why despite an impending economic crisis in the country, Diamond Bank is full steam ahead with its financial inclusion activities, launching its agent banking product Diamond Closa in August 2016, as well as planned rollout of KWIK Loan, a short-term, instant approval loan program based on the clients’ savings history.

Diamond Bank has been in the innovation business for many years. So when the Central Bank set out its national strategy to bring more people into the formal financial sector in 2012, the Bank was quick to recognize and act on, the opportunity not just to expand their client base, but to be part of the national financial inclusion success story by being the bank that empowers low-income Nigerians.

The bank thought of a good place to start?

“In Nigeria, any time you see a market, there will be a lot of women there,” according to Mr. Olubiyi. The fact that women also made up the majority of the unbanked segment made it an easy decision with the bank to start their financial inclusion activities with women.

It was at this time that Diamond Bank partnered with Women’s World Banking to develop BETA, a savings account that can be opened in less than five minutes and has no minimum balance and no fees. BETA was also designed as a convenient and accessible product to the market women-agents known as BETA Friends visit the customers at their stalls in the market to open accounts and process transactions (deposits, withdrawals, bills payment, etc.) using a mobile phone application.

The product, solely driven using Digital Financial Services platform, was a tremendous success: more than 35,000 accounts were opened in the first six months alone, 40% by women. And nearly three-quarters of the accounts were being used on a regular basis. And this was only the beginning. Once the market women had access to a convenient savings account, they wanted more.

According to Mr. Olubiyi: “We started hearing from our clients that they wanted a way to save for a specific goal like childbirth, child’s education, wedding, etc. Some had already started using the BETA Savings account like a current account and wanted another type of savings account, hence the introduction of the BETA Target Savers account.”

Since then, Diamond Bank, together with Women’s World Banking has been building a robust and diverse set of product offerings to meet this segment’s growing financial needs. “After Target Savers, the same clients asked us, ‘don’t you have a loan product where you can give us credit or a small loan to expand a business or add a second shop?’ So we worked with Women’s World Banking to devise a way to use the client’s BETA savings history as a way to give them a credit score. The results of the pilot were profound; 100% repayment rate on the loans given out. We are getting ready to go live with this to extend credit as much as possible to this segment.”

Diamond Closa is the bank’s most recent initiative aimed at providing affordable and convenient products and services to the under-banked segment of the society. It is a network of fixed agent locations attached to existing businesses in the community.

“With Diamond Closa, we are making sure that a Diamond Bank client can take care of their financial needs, wherever they are.” And with introduction of Diamond Y’ello, a hybrid mobile savings account offered in partnership with MTN which affords customers a blend of banking services and telco benefits, Diamond customers can transact wherever and whenever they want.

“Our idea is to truly position financial inclusion as a real business. It thrives mostly with collaborative effort, and we will keep on investing in this with our partners, Women’s World Banking, MTN, EFina and The Gates Foundation who have been key drivers in our success story. We want to build a platform to serve all customers in the society by making our the Bank for Everyone,” says Mr. Olubiyi