Digital Financial Services – A quick review of the Nigerian Landscape, with specific emphasis on Kaduna

Digital Financial Services – A quick review of the Nigerian Landscape, with specific emphasis on Kaduna


Digital financial services (DFS) comprises a broad range of financial services accessed and delivered through digital channels, including payments, credit, savings, remittances and insurance. It also includes mobile financial services. In Nigeria, there has been a rapid increase over the past couple of years of DFS and this has increased the scope of work in this space significantly. The proliferation of digital identity systems, data driven financial products/services, crypto-currencies, blockchain applications, all have raised immense potential in this sector, as digital financial services are a major driver of greater financial inclusion in emerging and developing countries.

Financial Inclusion in Nigeria: 

Financial Inclusion in a society is when all individuals within that economy can easily open a bank account, can afford to access credit, and can conveniently, efficiently, and consistently use financial products and facilities. A financially included person’s incoming money is maximized, out-going is controlled and (s)he can exercise informed choices through access to essential financial services. Formal-only inclusion is the ownership of an account in a formal financial institution that requires account ownership and a high level of KYC. By contrast, informal-only inclusion is the ownership of an account in informal sectors, with little to no KYC needed, such as cooperative societies, Esusu groups, community associations, moneylenders, microfinance institutions, etc.

On the reverse side, financial exclusion is the inability of specific people within a system to access formal financial products and services, as this class of people cannot afford even the most basic low cost, suitable and safe financial products and services from mainstream providers.

Financial exclusion may be due to inadequate education, lack of valid identification, geographic challenges, no credit history, and in many cases, the availability of only expensive financial products in certain areas. Several research findings have highlighted that financial exclusion is more prevalent in women than in men, with an estimated 36% of the more than 38 million financially excluded Nigerians being women, and this gap is continually widening, especially in the rural areas. 

DFS and the gender gap:

“Digital financial services has contributed to the increasing financial inclusion of women, but in some countries, it has been disproportional. Even though access to finance for women is rising, the gender gap is still persistent” (Dr. Alfred Hannig, Executive Director, AFI).

Reasons for this vary but can be broadly heaped into two buckets: socio-economic and cultural factors.

It has become evident that cultural and gender expectations, particularly in rural areas, lead to lower income and education levels in women than in men. Marriage (or age at first marriage) also limits earning potential. In the early years of marriage, women are often expected to bear and raise children and take on household chores. Therefore, women who marry young have less time to develop skills, experiences, and relationships significant to employment. This translates to less time to go to school, learn where to buy goods to sell at the market, etc. As a result, their life-long earnings are likely lower than women who marry later. A woman with less money has less of a need for formal financial services as found in a research by AFI in 2020. This would seem to imply that there is more reliance on DFS, but in a heavily cash dependent society, this is hardly the case.

Globally, women typically earn less than men, and spend more on day-to-day household needs, leaving little to nothing left to purchase larger goods, make investments, or save. Narrowing this down to Nigeria, and especially the rural areas found in the Northern part of the country because of their more conservative ways, such women often leave the major financial decisions to the men, and are often also time-poor, as they manage household chores, raise children, and do odd jobs. As a result of this, they are entirely outside of the mainstream workforce due to cultural expectations and time poverty as they spend most of their time at home or within their community, limiting their exposure and opportunities to learn about, interact with, and access financial services. Such seclusion can foster inaccurate perceptions of bank accounts, financial service fees, and interests. 

These reasons allow us to draw the following conclusions:

  1. Motherhood and money can be incompatible. In these rural areas, gender differences in labor force participation and employment impact women’s ability to access and manage resources. Young women are in their prime working years but have the lowest workforce participation rates (
  1. Local customs may also limit mobility and earning potential for women. For many women, a marriage might mean they have to quit their job because this could be perceived as a reputational risk. 
  1. Home-based and/or informal work makes formal financial services less relevant for women. Even if a woman is working during this stage of life, informal work is more likely to be preferred due to the flexibility when balancing with other family needs. In rural areas, a woman who wanders too far outside of her home (even for work) may be questioned for her morality and decency. Further, a woman who works can threaten the position of a man. When women are working from the home, they are most often transacting in smaller increments and in cash-based ecosystems. The value proposition to engage with financial services – even digital financial services – is diminished for these cash-driven small businesses (Women and Money PDF)

Thus, it becomes clear that a significant challenge for DFS to hack is how to ensure that the poor rural dwellers are included, considering the lack of general and financial sophistication among this segment of the Nigerian society, and the generally low level of financial literacy.

DFS in Kaduna:

To focus on Kaduna,  Kaduna State covers a large land area representing about 4.6% of the total land area of Nigeria, the twelfth largest land area in Nigeria. The state is strategically placed, almost at the geographic center of Nigeria. The state is made up of 23 local government areas. 70% of the populace are Muslims, while 30% are Christians (Bununu et al., 2015).

Compared with other states like Abia, Borno, Edo, Kaduna, Lagos, and Niger, Kaduna state has a slightly low cumulative rate of economic empowerment for women ages 15 to 49. They have low rates of ownership of a bank account (13.9%) and the highest rates of GBV (54.4%)(M. Foundation, 2018).

Kaduna State’s rural and youthful population has implications for Financial Inclusion. The EFInA Access to Financial Services in Nigeria 2020 survey conducted across the 23 local governments of Kaduna state with a total participant figure of 4769. In Kaduna, we find that a large part (69%) of the geographical landscape is rural, which implies that these people may not have access to formal financial services. Despite the slightly skewed indices within the state(44% can read and speak English, 66% can read and speak Hausa, 12% have no formal education, 87% have a formal ID Voter’s card, and 1.6 million are business owners), the high ownership of mobile phones and interest in digital financial services present favorable conditions for reversing the economic exclusion of over half of adults in Kaduna State, as a quarter of the adults there are considered to be financially healthy. A survey has shown that 38% of adults use regulated financial services and the state has the highest financial inclusion rate in the North-west. Of this number however, only 30% are women.

“While the majority of the adults are using bank services, 33% out 38% adults using financial services in Kaduna State are bank users. Although the state has the highest financial inclusion rate in the North-west, 62% of adults in Kaduna State still do not use any regulated financial services. Financially excluded adults in the state are more likely to reside in rural areas, have lower levels of education, be micro-entrepreneurs or farmers, and have limited access to bank branches or other financial access points.

Women continue to be more financially excluded than men, with only 30% of women in Kaduna State using regulated financial services, compared with 46% of men. Restrictive gender norms contribute to this gap in access; for example, only 21% of women in the state have the final say on whether they can work to earn income, compared with 87% men,” according to an EFInA report.

The Changing DFS Landscape:

As part of the effort to increase financial Inclusion and with support from the Rockefeller Philanthropy Advisors and Gate Foundation, the Kaduna State Government (KDSG) in July 2021 developed a roadmap for the adoption of a state-wide financial inclusion program.

As stated earlier, there has been a recent rise in fintech products within the Nigerian landscape that aim to boost financial inclusion, however many of the digital financial services (DFS) currently available work only on smartphones, putting low literacy and rural residents at a disadvantage. To specifically address this, a new crop of DFS are being churned out. A few of these are: 

  1. HerVest which was launched in Sept 2021 and targets excluded women, especially farmers
  2. BETA savings account by Diamond (Access) Bank which provides easy access for market women to save via BETA agents within the market
  3. Awabah is a micro pensions solution that is accessible with both smartphones and feature phones
  4. TraderMoni introduced in 2018 by the FG, providing interest free loans to petty traders, artisans and farmers, and building their credit ratings
  5. Kiakia, a lending platform for small and personal business loans that allows negotiated interests
  6. Mobile Money services via Telecommunication companies. This has been approved in principle by the CBN, for provision of financial services to the unbanked. While MTN has launched its Momo Money, Airtel is yet to launch its own solution called SmartCash.


In a nutshell, women’s use of DFS in Nigeria as a whole and in Kaduna State specifically is impacted by several factors, and these have led to significantly reduced numbers of women who can be said to be financially included in the state. We then invite you to lend your voice in answering these questions:

  • How can DFS drive for better financial inclusion? Through better regulations? 
  • How might we make digital financial services and savings more relevant to women? 
  • How might we help them leverage their secret savings into a pathway to financial stability? How might we increase her autonomy over household finances through DFS? 
  • How can women in Kaduna State be incentivized to use digital financial services? What would that path look like?
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