Institutional Environment and Access to Microfinance by Self-employed Women in the Rural Areas of Edo State

This brief provides an overview of the institutional environment of microfinance in Nigeria. Poor women in rural Nigeria have limited access to financial services and increasingly, private sector-led MFIs are stepping in to filling this gap. The study uses focus group discussions, interviews and case studies of self-employed women in Edo State, Nigeria to reveal that rural women:

• Favor traditional informal MFIs that still exist side by side with formal MFIs;
• Find it difficult to borrow from banks because they do not have bank accounts and collateral, and do not know the procedures for accessing bank loans;
• Are increasingly accessing formal MFIs;
• Report positive impact of microcredit on businesses and family life.

The study makes recommendations to increase rural womens access to financial services in Nigeria. They include:

• Savings-based or asset-based collateral should be explored to help rural women access bank loans;
• Banks should educate rural women on procedures for opening accounts;
• More microfinance banks must be established in Local Government Areas in order to reach rural dwellers;
• Commercial banks with microfinance departments must develop products that target rural self-employed women.

Read the full report here.