Partner Organization: Diamond Bank

On international women’s day, women save to succeed

Posted on by TIMOTHYRADIER

This month, we celebrate International Women’s Day united in the 2018 theme “Press for Progress.” While much of the discussion is around how global actors are pressing for progress on women’s equality at the macro level, I’d like to take a deeper look at how a low-income woman presses for progress in her own financial life.

Our program, Financial Sector Deepening Africa (FSD Africa), funded by UK aid from the UK government, is supporting Women’s World Banking’s partnership with Diamond Bank in Nigeria to improve access and usage of savings accounts among low-income clients, particularly women.

Three years into this partnership, we’re starting to understand just how transformational saving with a formal institution can be for women.

Women’s World Banking’s global research shows that women have specific and often complex savings needs. They are juggling scarce resources to cover day-to-day expenses with an eye toward the future. They save against emergencies and toward goals such as education and business growth.

However, low-income women often face barriers to accessing a safe place to save due to mobility and time constraints as well as low levels of financial literacy. They are forced to save in less reliable ways: at home in a drawer or under a mattress, by buying excess stock for their businesses or through a neighborhood savings club.

In Nigeria, Women’s World Banking’s research revealed a strong savings culture. Women running businesses in the bustling urban markets of Lagos put aside as much as 60 percent of their daily income in informal savings tools such as ajo, adako and other methods. What was most surprising though—these women’s businesses were located literally steps from bank branches. Why were they not opening savings accounts?

The answer—the distance is emotional, not physical. These market women are familiar with banks yet they do not see them as relevant or accessible. Even those who have accounts usually place most of their money in traditional, though more informal, financial tools. Diamond Bank set out to close this gap by offering an innovative and relevant savings product that crosses the barriers preventing low-income Nigerians from accessing formal financial services.

Planting a Seed: A transformational savings account

The BETA (meaning “good” in pidgin English) account targets self-employed market women and men who want to save frequently (daily or weekly). The account can be opened in less than five minutes and has no minimum balance and few fees.

Because these clients, especially women, value convenience, the product is built around serving women in the market where they work. Agents, known as BETA Friends, visit a client’s business to open accounts and handle transactions, including deposit and withdrawal, using a mobile phone application.

With support from FSD Africa, Women’s World Banking and Diamond Bank are expanding on the BETA proposition to offer women more financial tools and services, including BETA Target Savers, a long-term savings account to help clients work toward larger goals.

Today, Diamond Bank has more than 520,000 new savings account holders who are using these valuable tools, more than 197,000 of whom are women. That’s more than a half million low-income clients who did not previously have access to Diamond Bank, a bank often just steps away from their businesses.

One woman client, who has BETA Friend agents visiting her market stall regularly to collect deposits, put it quite simply:

I want them to be coming around often so that I can save my money, so I can use it to do better things for myself.

With Target Savings, we’re hearing a similar sentiment. A woman client said,

You keep your money to achieve what you want to do. You keep in the back of your mind to achieve your goal.

When we look at how women are able to “press for progress” in their own lives, we know that true financial inclusion is not just about opening accounts, but meaningful usage of these accounts to achieve financial goals and build a better future. Women’s World Banking’s partnership with Diamond Bank is at an exciting phase of the project where we can start to understand just how transformational these savings accounts will be.

While we’re in the very early stages of analyzing the data, Women’s World Banking is looking at exactly how clients are doing this. After conducting a baseline survey in 2015 as well as a follow up survey in late 2017 to measure how clients are using the savings accounts to improve their lives, we are seeing promising early results, specifically in using savings to grow businesses and achieve goals.

Clients are reporting using their savings to fund business expansion. This is a critical point as financial services for low-income women are often associated with micro loans, and while credit is an important tool, savings is essential for women to grow their businesses.

Additionally, time and time again, when Women’s World Banking asks women about their primary savings goals, education for their children is at the top of the list. Initial survey results are showing that BETA clients are saving for their children’s education and are more likely to have all of their school-aged children in school.

On International Women’s Day, we’re happy to celebrate these promising signs of progress for women in Nigeria. We look forward to continuing to learn more about how savings tools can help women to press for progress.

This blog was published by Women’s World Banking http://www.womensworldbanking.org/news/blog/international-womens-day-women-save-succeed/

FSD Africa’s funded project hits 1 million target of clients accessing financial services in Nigeria

Posted on by 5iveafrica

In May 2015, FSD Africa and Women’s World Banking signed an agreement to support Diamond Bank Nigeria in its aim to reach a total of 1 million new clients by the end of 2018. In June of this year, that target of 1 million clients was achieved.

FSD Africa’s support has been focusing on two main initiatives. The first is the expansion of an existing value proposition, a transaction account which is focusing on giving market traders a way to keep their money safe digitally (BETA). The second is the introduction of bank accounts for young people (from 13-25).

FSD Africa also supports the expansion of BETA products. To this end, FSD Africa has been funding the development of two distinct credit products focusing on individuals and Micro, Small and Medium Sized Enterprises (MSMEs). This work shows some of the problems with creating greater access. But it also demonstrates how to overcome them.

Creating access to Financial Services for Women

One of the core focus of the project was to deliver an increase in the number female account holders. The aim was always achieve as many women signing up to the new accounts as men. However, it soon become clear that an inherent disparity exists in the number of women who sign up, relative to the number of men. The figures for June 2017 suggest the percentage of female account holders is 38% for the BETA account.

This would suggest that the uptake of products by women have not been successful. However, changes in marketing have raised this percentage from 35%. Most important of these changes has been to increase the engagement with women about the upsides of the product. This helped to overcome an initial scepticism about working with a formal financial institution. Although the project is still short of its targets, marked improvements have been made.

For the youth products the picture is markedly different. Here the gender split is almost 50/50 (49% girls). The key difference between the products is the sign-up process. For the youth proposition, the registration occurs with the parents. This means the deliberation is much less, when signing up. A core lesson is therefore to encourage marketing that helps women to understand how the product would help solve their problems. Activity rates for female youth accounts are higher which shows that early engagements helps people to take control of their finances early.

For BETA accounts, women tend to be much more deliberate about signing up for new products. In many cases the agents who manage the financial products make multiple visits to a potential client. But, this investment pays off; female clients are more likely to be active on the platform, have higher standing balances and deposit more regularly.

Managing Change within Institutions

Within Diamond Bank the changes have also been marked. When the project started our work was housed in the retail segment. Yet, overtime it became clear that in order to create long lasting change the product needed to have its own segment. Creating a separate unit has increased the accountability within the institution and shown that the product can stand on its own feet, financially.

Our project conducted both senior and middle management leadership development programmes. These focus on helping Diamond Bank understand the complexity of change management, helping the team to “buy-into” the desired change. It also helped prepare them to manage future challenges. Our support set clear goals which ensure better teamwork, create a common purpose and helped management support the process of change.

Looking ahead, this project still has more targets to achieve and although good progress has been made work still needs to be done on increasing access to credit. They key to achieving these goals is learn from lessons that have been discovered through our work. We want to share these and will be launching a series of blogs here, from next month, that will look at the key successes and challenges from this project.,

Building trust – why banking needs to be more personal

Posted on by 5iveafrica

In Edelman’s annual study on levels of trust in industries, the Financial Services industry once again came bottom, as they have done for the last 5 years. Although the industry has been recovering from its lows in the early 2010s, only 51% of people have trust in the sector. To put that in perspective, 9% of people have more trust in the Telecommunications industry and a whopping 23% have more trust in Technology companies (who have come top the last 5 years).

This “trust gap” exists all over the world and I was reminded of it on a recent visit to Nigeria. There, as part of one of our partners product launch, I met a lady who told me that she had recently signed up to one of the banks’ new services. When asked why, she said that on three previous occasions she had trusted a local Susu[1], who had then run-off with her savings. To be clear, the “trust gap” is not only an issue for women; many men face similar issues when dealing with formal financial institutions.

That is the heart of the problem. Financial management is difficult and we often entrust our hard earned cash to someone who, we hope, has our best interest at heart. But the world is full of people whose trust has been abused on financial matters. Almost everyone knows someone who was affected by the failure of a bank, defrauded by business associate (like that Susu) or trusted the wrong family member.

In this “low-trust” environment, financial institutions are increasingly battling these stories, as well as a lack of trust in the services they offer. Nowhere is this more evident than in the continued exclusion of women from financial services in developing countries. Despite being 40% of the world’s workforce, across the world, women owned businesses are experiencing a funding gap of $260billion to $320billion per year.

This is striking and becomes even more surprising when one understands that women are better at repaying loans. Not only that, they use money more productively and use financial services more frequently. This makes women profitable and, because of the high exclusion rates, a key target demographic to expand a client base.

Nevertheless, bringing women on board is not a top priority for many CEOs in the financial space. There is a catch; women, who are much more cautious when it comes to adoption of new products, are harder to gain as clients in the first place. In our work with Women’s World Banking and Diamond Bank in Nigeria we endeavour to increase the number of female clients by changing incentive structures for on-boarding agents, employ more female agents for outreach and designing products specifically targeting women.

Although we have brought on board many new clients of both genders, women are a smaller percentage than we would like (below 50%). Which takes us back to the issue of trust. The lady in Nigeria, had to be cheated out of her money three times before she considered approaching a formal financial service provide. That tells us that the level of mistrust of formal financial institutions is much higher than we want to admit.

Organisations such as FSD Africa, whose core mission is to develop financial markets that are responsive to the broader developmental needs of African economies and people, need to find better ways to reaching women and young people who are disproportionately excluded from financial services.

Our work with Women’s World Banking and our partner institutions Diamond Bank (Nigeria) and NMB (Tanzania) is to develop new products that seek to target these groups. One of the key learnings from our work is that products need to be well communicated to the target group and this often takes time. That is why Diamond Bank’s Agent Network in Nigeria has developed specific pitches for potential female clients. These go beyond a generic sales script, which is usually sufficient to bring on board male clients. The agents are educated on how to build trust with the customer and demonstrate that access to financial services gives them better security, improves their record-keeping and gives them greater financial control.

There are a number of other factors that limit women’s financial access. For example, many African countries remain highly patriarchal and women are less likely to be literate than men. Changing these attitudes takes time but ultimately, developing women’s ability to use savings and credit products will foster greater financial independence and increase gender equality.

Overcoming the “trust gap” is hard and that is why FSD Africa seeks to create long-term financial market impact, for both men and women. We understand that increasing financial inclusion is not just about the individual customer – our Change Management interventions seek to revolutionise the way financial institutions see and interact with their potential clients.

The “trust gap” exists for both men and women and relates to almost all Financial Service Providers. Consequently, FSD Africa is always looking for new partners that share their view on developing financial systems across the continent. If you or your institution are interested in building out services, as our partners have done, please reach out to us. FSD Africa will be speaking at the MasterCard Foundation Event in Kigali on the 20th and 21st of October 2016.

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[1] Informal savings channel in West Africa, usually operated by one person for a number of market traders).