#1EFINA Enhancing Financial Innovation & Access Access to Financial Services in Nigeria 2020 Survey Kaduna State Deep Dive July 29th, 2021#2EFINA Contents Enhancing Financial Innovation & Access A Background Objectives & Methodology B Kaduna at a Glance C Financial Inclusion Indicators (Financial Access Strands) 어 Usage of Financial Services E Beyond Financial Inclusion F Recommendations Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 2#3EFINA Enhancing Financial Innovation & Access EFINA Overview Enhancing Financial Innovation & Access (EFINA) is a Financial Sector Deepening (FSD) organisation that promotes inclusive finance in Nigeria. EFINA was established with support from the UK's Foreign Commonwealth & Development Office (FCDO) in 2007 and began receiving funding support from the Bill & Melinda Gates Foundation in 2009. EFINA is renowned, within Nigeria's financial sector, for providing thought leadership toward achieving financial inclusion and championing the unbanked. By funding and catalysing innovation, providing cutting-edge research, advocating for inclusive policies, and building capacity, EFInA has gained a reputation as an "honest broker" among the private and public sectors in Nigeria. EFInA's Access to Financial Services in Nigeria surveys and other research have served as credible sources of information for policymakers and regulators, including the Central Bank of Nigeria (CBN), the National Insurance Commission (NAICOM), the National Pension Commission and others, to formulate regulations and policies. EFINA has a strong focus on promoting digital financial services, and in recent years has taken a leading role in supporting an emerging FinTech sector in Nigeria. Since its founding, EFInA has contributed to the increased focus on financial inclusion in Nigeria, convening and supporting stakeholders to develop and work toward the implementation of a National Financial Inclusion Strategy. Between 2008 and 2018, the number of adults using formal financial services in Nigeria increased by more than 27 million, and EFINA has directly enabled more than 4.5 million Nigerians use formal financial services through its grants.#4EFINA Enhancing Financial Innovation & Access Objectives of A2F 2020 Survey - Kaduna Deep Dive To measure the levels of financial inclusion (i.e. levels of access/usage of financial products and services - both formal and informal) Measure trends in access to and usage of financial services in Kaduna State Understand financial behaviours of adults in Kaduna State, including various products/services used to meet their financial needs Understand financial health of adults in Kaduna State Provide credible data that can highlight opportunities for policy reform and market opportunities for financial service providers Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 4#5EFINA Enhancing Financial Innovation & Access Coverage and methodology of the A2F 2020 Survey - Kaduna Deep Dive Design • • Provided by the National Bureau of Statistics (NBS) Sampling of respondents was based on equal representation (around 200 respondents) per LGA Allows for statistically robust headline indicators of financial access at the LGA and State levels Coverage • • Representative sample of adults (18+) in Kaduna State across all 23 LGAs The survey includes 4796 respondents Household listing and data collection was conducted from November 2020 to March 2021 by the Research Firm - Ipsos Nigeria, with supervision from the National Bureau of Statistics (NBS) • KADUNA Questionnaire • The survey questionnaire was developed by EFINA, with input from a wide range of industry stakeholders. The questionnaire (in English) was translated into and administered in Hausa, Yoruba, Igbo and Pidgin English Results • Results were weighted by the NBS to provide for the total adult population. Kaduna State Bureau of Statics. (KDBS) also participated in a workshop on the data weighting Also benchmarked to population estimates for verification Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 5#6EFINA Enhancing Financial Innovation & Access Kaduna at a glance#7EFINA Enhancing Financial Innovation & Access Kaduna State's rural and youthful population has implications for financial inclusion 69% rural areas 0 83% own a Mobile Phone 44% read and speak English 66% read and speak Hausa KADUNA 87% have a formal ID Voter's card is prevalent among the formal IDs 1.6 million business owners 12% have No Formal Education Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 7#8EFINA Enhancing Financial Innovation & Access 3.5m (84%) adults' livelihoods were negatively affected by the COVID-19 pandemic Income reduced Could not operate due to restrictions Stopped working for some time 30% 21% Same as before 11% Got retrenched 11% Income increased 4% Same as before, but expect worse 3% Don't Know 2% Others 1% Company benefits reduced | 0% Supplemented income with Govt.grant | 0% 67% COVID-19 Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 8#9EFINA Enhancing Financial Innovation & Access Financial Inclusion Indicators (Financial Access Strands)#10EFINA Enhancing Financial Innovation & Access Defining financial inclusion Total adult population (18 years and older) Financially included = have/use financial products and/or services - formal and/or informal Formally served = have/use formal financial products and/or services provided by a financial institution (bank and/or non-bank) Informally served have/use financial products and/or services which are not regulated Financially excluded = do not have/use any financial products and/or services formal and/or informal Banked = have/use financial products/ services provided by a bank regulated by the CBN Served by other formal financial institutions = have/use financial products/services provided by regulated non-bank financial institutions Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 10#11EFINA Enhancing Financial Innovation & Access Adult Population 18+ Years 106m National The North West is the most financially excluded geopolitical zone in Nigeria, with increasing rates of financial exclusion 45% 23.9m North West 16% 7% 9% 13.1m North East 15.4m North Central 13.1m South East 17.1m South South 33% 23.4m South West Banked 51% 58% 55% 63% 4% 13% 6% 14% 68% 7% 17% 50% Reduction in the excluded (2018-2020) -1.0% 36% +5.4% -4.1% -4.5% 26% -3.5% 5% 11% 26% 6% 17 -0.5% 22% -1.9% 5% 15% 17% Informal Excluded Other formal (non-bank) Regional Access to Financial Services in Nigeria Source: EFINA Access to Financial Services in Nigeria 2020 Survey 11#12EFINA Enhancing Financial Innovation & Access Kaduna State Financial Inclusion: Nearly 2 in 5 (1.5 million) adults use formal financial services 38% Formally served These four strands are mutually exclusive 62% Formally excluded Formal Informal Banked other only 33% 5% 7% 1.3m 0.2m 0.3m 4.1m Financially excluded 55% 2.3m Banked: adults who have access to or use of deposit money bank, in addition to having/using a traditional banking products such as ATM card, credit card, savings account, current account, fixed deposit account, mortgage, overdraft, loan from a bank or Islamic banking products Formal other all adults who have access to or use of other formal institutions and financial products not supplied by deposit money banks including insurance companies, microfinance bank, pension schemes or shares. It also include remittance through formal channels Informal only: all adults who do not have any banked or formal other products but have access to or use only informal services and products. This includes savings clubs/pools, esusu, ajo or money lenders; as well as remittance through informal channels such as transport service or recharge card ☐ Financially excluded: adults who are not in the banked, formal other or informal only categories even though the person may be using or have access to any of the following loan/gift from friends or family and loan from employers as well as remittances via a family member or friend Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 12#13EFINA Enhancing Financial Innovation & Access • Adults in Kaduna State use a combination of financial services to meet their needs Formally served adults use a combination of formal and informal mechanisms to manage their financial needs, indicating that their needs are not fully met by the formal sector alone Microfinance bank Commercial banks Non-interest banks Insurance companie Capital markets S Pension schemes or shares Banked 33% Formal other Remittance through other formal channels 19% Agents Savings club Informal 13% Microfinance institutions Remittance through transport service and recharge cards Cooperatives Esusu Ajo/ Money lenders Banked 16% 3% 11% 3% Informal Formal Other only 7% 1% 4% 55% Excluded population Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 13#14EFINA Enhancing Financial Innovation & Access Financial inclusion in Kaduna State has remained stagnant despite gains in the banked population Slow uptake of non-bank formal and informal financial services continues to drive exclusion in Kaduna % of the adult population 2020 33% 5% 7% 2018 30% 6% 9% 55% 55% Banked Formal other (non-bank) Informal Excluded 2018 figures computed from the A2F 2018 survey which comprises of a sample of 750 respondents in Kaduna state 14#15EFINA Enhancing Financial Innovation & Access • Young adults continue to be significantly more excluded Adults in the 18 to 25 age bracket are significantly more likely than older adults to be financially excluded. Adult population % of the adult population 18-25 1.0m 24% 5% 6% 65% 26-35 1.3m 36% 6% 6% 0.9m 36-45 34% 5% 8% 0.5m 46-55 44% 0.4m 56 & above 33% 4% 8% 4% 6% 53% 53% 55% 46% Banked Formal other (non bank) Informal Excluded Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 15 45#16EFINA Adults with higher levels of education are significantly more likely to be financially included Enhancing Financial Innovation & Access secondary complete and above % of the adult population 57% 3% 4% 35% secondary incomplete and below 14% 6% 8% 71% Banked Formal other (non bank) Informal Excluded Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 16#17EFINA Increased financial inclusion gender gap, driven by women's Enhancing Financial Innovation & Access underrepresentation in the formally served category, is a cause for concern • Slow uptake of both formal and informal financial services continues to drive exclusion of women in Kaduna % of the adult population Gender gap Male 42% 2020 Female 24% 6% 8% Male 2018 37% 4% 5% 4% 7% Female 24% 8% 11% 62% 49% 13% 55% 3% 58% Banked Formal other (non-bank) Informal only ■ Excluded 2018 figures computed from the A2F 2018 survey which comprises of a sample of 750 respondents in Kaduna state Source: EFInA Access to Financial Services in Kaduna State 2020 survey 17#18There is a wide gender disparity in access to education, mobile phones EFINA and financial decision making among Kaduna adults Enhancing Financial Innovation & Acce 89% own a mobile phone 52% have complete secondary education and above 54% have a formal ID 76% own a mobile phone 36% have completed secondary education and above 46% have a formal ID Financial decision making Socio economic factors LAST CALL 50% are farmers 33% are business owners 21% are farmers 50% are business owners 84% Involved in making decisions on how money is spent in the household 53% Involved in making decisions on how money is spent in the household 83% Control of how money is spent in the household 87% Have a final say on whether to work to earn income or not 43% Control of how money is spent in the household 煳 21% Have a final say on whether LAST CALL to work to earn income or not Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 18#19EFINA Farmers and dependents are more likely to be financially excluded Enhancing Financial Innovation & Access • Significant intervention needed for about 30% of the adult population who rely on farming Financial inclusion by primary source of income % of the adult population 2% 1% Salary/wages from a business/company (formal sector) Salary/wages from an individual with own business (informal sector), from an individual for chores such as domestic chores or farm labour Employed in formal sector Employed in informal sector 45% 94% 2% 8% 45% 7% 8% Own business/trader - farming products, non farming products, agricultural inputs, provide a service Get money from household member, family & friends Subsistence/small scale Business owners 37% Dependents 28% 7% 7% farming, commercial/large scale farming Farming 25% 4% 7% 65% 58% 48% Banked Formal other (non bank) Informal Excluded Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 19#20Enhancing Financial Innovation & Access • • EFINA Opportunities exist to reach the agricultural population, mainly through digital financial services and agent networks that can facilitate access in rural areas 1.7million adults rely on agriculture - 1.3 million rely on farming and 0.4m trade in farm produce/agricultural inputs Interventions to reach farmers must address the infrastructural challenge in rural areas to increase financial access Adults in Kaduna State who rely on agriculture for livelihoods Population dynamics 91% live in rural areas Socio economic factors (education & technology) 65% have not completed their secondary education or have lesser education Awareness of Access points near them IIII 74% are women 83% own a phone 79% are not aware of any formal financial access point (such as bank branch or financial service agent) near them Source: EFInA Access to Financial Services in Kaduna State 2020 Survey 20 20#21EFINA Only about one quarter of rural adults in Kaduna State are banked, compared to nearly half of adults in urban areas Enhancing Financial Innovation & Access • • Banking services are still not reaching the rural areas; reach of other formal (non-bank) financial services is also limited in Kaduna State Rural adults are slightly more likely than those in urban areas to rely exclusively on informal financial services % of the adult population Rural 26% 5% 7% Urban 48% 62% 5% 6% 41% Banked Formal other (non bank) Informal Excluded Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 21#22EFINA Enhancing Financial Innovation & Access Financial exclusion varies widely by LGAs % of the adult population Makarfi 16.7% 1.8% 5.7% Kauru 21.1% 1.0% 4.5% Lere 20.8% 2.1% 4.0% Kudan 9.5% 7.9% 10.1% Soba 23.0% 2.7% 4.4% Igabi 18.2% 6.3% 5.7% Kajuru 22.2% 7.6% 6.3% Jema'a 21.4% 11.4% 3.7% Ikara 26.4% 5.6% 4.9% Sanga 29.9% 3.3% 6.6% Jaba 32.2% 4.1% 3.6% Giwa 24.8% 8.1% 8.3% Kubau 13.4% 12.4% 16.8% Sabon Gari 38.4% 2.3% 3.4% * Birnin-Gwari 39.7% 2.1% 4.4% Kachia 44.3% 1.0%4.2% Kaduna North 45.8% 0.5%4.1% Kagarko 37.8% 8.4% 5.4% Zaria 43.0% 1.1% 8.1% Chikun 43.3% 6.1% Zangon Kataf 42.8% 5.1% 10.4% 12.1% Kaura Kaduna South 51.9% 3.1% 7.0% 59.0% Banked 11.3% Other Formal 5.7% Informal 75.8% 73.4% 73.1% 72.5% 69.9% 69.9% 63.9% 63.6% 63.1% 60.2% 60.2% 58.7% 57.3% 55.9% 53.8% 50.6% 49.6% 48.3% 47.7% 40.2% 40.0% 38.0% 24.0% Excluded *Due to security reasons, only respondents in 'safe to visit' areas were interviewed in Birnin Gwari. Hence, the sample in Birnin Gwari is considered non-random and not representative of the full Local Government Area Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 22#23EFINA Enhancing Financial Innovation & Access The excluded population#24Out of the 4.1 m adults in Kaduna, 2.3m are financially excluded, most of EFINA these excluded adults are females, aged 18-25 years and business Enhancing Financial Innovation & Access owners Population dynamics Socio economic factors 54% are women 36% are farmers M 47% are business owners 84% have access to mobile phones Financial behavior 19% are borrowing from family and friends 68% do not have the formal ID and proof of address required to open an unrestricted account 21% are saving at home 11% are remitting through family & friends Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 24#25EFINA Enhancing Financial Innovation & Access Key Take-Aways • • • • • • Rates of financial exclusion are significantly higher in the North West than in other regions of Nigeria; driving inclusion in the North West is critical to meeting nationwide goals related to financial access Although Kaduna State has above average levels of financial inclusion compared with the North West overall, more than half of adults in Kaduna State remain financially excluded. Kaduna State can lead the region in driving financial inclusion by expanding financial access to the 2.3m excluded adults in Kaduna State Relatively few unbanked adults are using other formal (non-bank) or informal financial services The widening financial inclusion gender gap is part of a wide range of gender disparities partly driven by socio-cultural norms that deny women equal opportunities to access education and involvement/control in financial decision making, among others While women are significantly more financially excluded than men, many are economically active, with 50% of women in Kaduna State reporting that their primary source of income is their own business Rates of financial exclusion are high among women, youth, people residing in rural areas, and farmers Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 25 25#26EFINA Enhancing Financial Innovation & Access Use of financial products/services#27EFINA Only one-third of adults are banked, with savings and remittances driving the Enhancing Financial Innovation & Access use of bank accounts % of adults 1.4m 2.8m 33% 67% Banked ■ Unbanked National 2020 Kaduna 2020 Banked 45% 33% Savings 27% 13% Remittances 25% 14% Credit 2% 1% Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 27 27#28EFINA Enhancing Financial Innovation & Access Financial service agents are driving use of other formal non-bank financial services % of adults 3.4m 0.8m Formal other 19% % of adults Insurance 1% Pension Mobile money Financial agents Microfinance 1% banks 2% 5% Yes No 81% National 2020 Kaduna 2020 Other formal 28% 19% (non-bank) Savings 12% 7% Remittances 6% 3% 18% Credit 1% 0.4% Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 28#29EFINA Enhancing Financial Innovation & Access Use of informal financial services in Kaduna State is relatively low compared with nationwide averages 13% 0.5m % of adults Most commonly used informal financial service providers (% of adults) Savings thrift Village/community association Savigs group 3% 3% Cooperatives 3% 87% 3.6m Yes No National 2020 Kaduna 2020 Informal 33% 13% 5% Savings 24% 9% Remittances 3% 1% Credit 8% 3% Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 29#30EFINA Enhancing Financial Innovation & Access Banking: Lack of access, irregular incomes, and perceptions of banking are leading barriers to banking for adults in Kaduna State Reasons for not having bank account (%) Income not regular 36% Banks are too far from where I live/work No job 22% 21% No reason 19% It costs too much to reach a bank 16% Prefer cash 12% Too much documentation involved/required It is expensive to have a bank account 6% Barriers Net % 6% Access to banks 38% Can't read or write 5% No identity document Attitudes/perceptions 36% 5% Charges and fees are too high (e.g. monthly maintenance fee) 4% Llittle/irregular income 36% Lack of trust 3% Unemployment 21% Must keep a minimum balance in the bank 3% Product knowledge/usability 16% Interest earned on deposits is low 2% Cost of banking 14% Used to have a bank account, but closed it due to bad experience 2% Other 2% Interest on loans too high 1% Too much corruption (e.g. bribes) 0% Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 30#31EFINA Enhancing Financial Innovation & Access Lack of awareness, suitability and insurable assets are main barriers to other formal non-bank financial services 1.5million adults are interested in using mobile money. • • 0.7million adults are interested in micro insurance • 1.3million adults would be encouraged to use mobile money if they understand how it works Awareness Why no use of Mobile Money (% of adults not using Mobile Money) Why uninsured (% of adults not insured) no reason 38% i have nothing to insure 85% 93% III 15% 26% don't know much what mobile money is 27% no reason 24% i use other ways to do the same transactions 17% haven't thought about it yet 14% 89% don't know where/how to get mobile money 9% i do not know the benefits of having one cannot afford to pay for insurance 13% 13% i do not trust it 6% i do not believe in insurance 11% it is not easy to use 6% i do not know where to go and get one from 9% it is expensive 4% 11% other, specify 3% Mobile Money 7% Micropension religious reasons/God will take care of it do not trust insurance companies they are cheats, they do not settle claims 6% 2% 1% Microinsurance services i need are not available 2% ■Yes ■ No Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 31#32EFINA Enhancing Financial Innovation & Access Key Take-Aways • • • A third of adults in Kaduna State use banks to manage some of their financial needs Lack of access to banks is a frequently-cited barrier to banking among unbanked adults in Kaduna State. However, initial use of agents indicates promise for further expanding access through channels, such as agent networks, that do not require bank infrastructure Low/irregular income, unemployment, and cost of banking are also cited as barriers to banking Relatively high rates of mobile phone ownership in Kaduna State, even among excluded groups, present an opportunity for expanding financial inclusion via affordable, relevant digital financial services. With more product knowledge, about one-third of adults say they would be interested in using mobile money At least 3 in 5 adults are neither saving, borrowing, nor remitting money through formal or informal channels - how are they coping? Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 32#33EFINA Enhancing Financial Innovation & Access Beyond Financial Inclusion Financial Health#34EFINA Enhancing Financial Innovation & Access Nearly 9 out of 10 adults are maintaining or accumulating reserves to help them build resilience from shocks and create opportunities for improved livelihoods Investing Saving $ 時: 62% of adults in Kaduna are saving money 40% are investing their money in assets for future cash flow Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 34#35More than two-thirds of adults are planning ahead financially, including EFINA currently trying to meet specific life goals Enhancing Financial Innovation & Access • Majority of adults are trying to meet business related goals, and are using social and non- financial mechanisms to meet goals PLAN 69% of adults are planning ahead financially Expressed goals (% of adults) starting or expanding a business house/apartment to live in/rent/sell buying equipment or assets for business or agric activity investment in education 8 buying land 2 buying or paying for a vehicle 1 To what extent do you agree or disagree with the following statement? Do you plan-ahead financially 8 11 41 Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 35#36EFINA 78% of the adult population experienced an episode of liquidity distress in the past 12 months Enhancing Financial Innovation & Access About half of distressed adults merely did nothing or readjusted their expenses to manage liquidity. Significant portion of distressed adults rely on physical and social mechanisms to cope Liquidity distress (% of adults) 22% % of distressed adults did nothing specific (waited, prayed) cut down on other expenses savings from bank or other financial institution informal financial institution 1 19 7 32 8% sold asset(s) 13 borrowed from family/friends 13 70% 42% used physical and received gifts/donations from friends/family social mechanisms 12 bought goods on credit 2 Severe distress Some distress No distress other 2 borrowed from formal and/or informal financial institution 1 Liquidity distress is defined as being unable to balance income and expenses. Severe - more than one month, some distress - once in the past year Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 36#37Enhancing Financial Innovation & Access EFINA 54% of adults experienced a financial shock in the past 12 months, mainly driven by economic (1.4 million) and health (0.5 million) related shocks. Adults were more likely to do nothing, borrow from family/friends, cut down on expenses, or sell assets than use savings to cope with shocks. Shocks with greatest impact on households (% of adults with shocks) price increases serious illness of a household member recession/bad economy 20 1993 30 50 Could recover from shock (% of adults) 24 failure of business 6 loss of job/income due to covid-19... 6 death of a relative/household member maintenance of farm/business tools 4 3 had to assist family/friends with... 3 agricultural crop/livestock... 2 member of household lost job/income 2 30 Low Medium High 46 How confident are you that you will get enough support in case of an emergency? Not at all confident, slightly confident, somewhat confident, don't know - Low, moderately confident - Medium, very confident - High Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 37#38EFINA Adults in Kaduna State tend to demonstrate stronger abilities to build and maintain Enhancing Financial Innovation & Access reserves, with lower ability to manage day-to-day Financial Health dimensions Low score Medium High score Ability to manage day to day (spend score) 70% 8% 22% No trouble making money last Build and maintain reserves (save score) 11% 55% 34% Save money, invest in assets Planning and prioritising (Plan score) 31% 45% 24% Plan ahead financially Ability to manage risks Could recover from financial shock 46% 24% 30% Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 38#39EFINA Only 1 in 4 adults in Kaduna State are considered "financially healthy"; nearly one- third are financially vulnerable Enhancing Financial Innovation & Access Nearly half of residents in Kaduna are just getting by, and are only one financial shock away from becoming financially vulnerable National FinHealth score (%) Regional FinHealth score (%) Kaduna Fin Health score (%) 27 21 39 39 34 == 40 ■Financially Healthy Financially Healthy Financially Coping ■Financially Coping ■Financially Vulnerable Financially Vulnerable 25 45 45 30 30 Financially vulnerable ■Financially coping ■Financially healthy Source: EFINA Access to Financial Services in Nigeria & Kaduna State 2020 Survey 39#40EFINA Enhancing Financial Innovation & Access The direct correlation between financial health and financial inclusion which is evident at the national level, narrows in Kaduna • Even among adults that use formal (regulated) financial services, less than one third are financially healthy Formally served 35% National Kaduna 40% 25% Formally served 28% 49% 23% Informally served 24% 41% 35% Informally served 18% 49% 33% Financially excluded 16% 37% 47% ■Financially healthy ■Financially coping ■Financially vulnerable Financially excluded 25% 41% 34% Financially healthy ■Financially coping ■Financially vulnerable Source: EFINA Access to Financial Services in Nigeria & Kaduna State 2020 Survey 40#41EFINA Enhancing Financial Innovation & Access Investment in assets plays an important role for adults in Kaduna State • At least 3 in 5 adults are making saving in non-financial assets • 1 in 2 adults have savings in farming/agriculture/livestock assets Have savings in non-financial assets (% of adults) 39% ■ Yes ■ No 61% Types of savings in non-financial assets (% of adults) Farming/agriculture/li vestock Property 33% Land Jewellry,gold coins etc. 3% 32% 51% Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 41#42While most adults score high in planning for their finance, a concern would be the low EFINA levels of financial knowledge and control which is required to execute their financial Enhancing Financial Innovation & Access plans Financial capability indicator dimension (%) Planning 4 37 Control Knowledge Choice 39 54 62 38 ■Low Medium ■ High 59 31 23 7 41 5 Planning - plan, save & invest Control - budget & track funds Knowledge - numerical knowledge and understanding of financial terms & conditions Choice - can evaluate financial products & services and lodge a complaint if not satisfied Financial capability is an average of the financial planning, financial control, knowledge and skills and making financial choices dimensions. Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 42#43EFINA Relatively low uptake of digital financial services, particularly for poor Enhancing Financial Innovation & Access women Actively use a digital stored - (commercial/ microfinance value account bank/ mobile money) Advanced users of digital stored- value account (beyond basic wallet & P2P) 28% of adults 20% of women 20% of the poor 13% of poor women MİLİ 17% of adults 11% of women 11% of the poor 6% of poor women Source: EFInA Access to Financial Services in Kaduna State 2020 Survey 43#44EFINA Enhancing Financial Innovation & Access Key Take-Aways • • Only 1 in 4 adults in Kaduna State are considered financially healthy, with the biggest challenges being the ability to manage day-to-day financial needs and the ability to manage risks Adults that use formal (regulated) financial services are less likely than adults that do not use formal financial services to be classified as "financially vulnerable." Still, only about one quarter of this group are considered "financially healthy" Majority of adults rely on social and physical mechanisms in managing their finances - saving, coping with risks, managing liquidity and financing life goals Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 44#45EFINA Enhancing Financial Innovation & Access Recommendations With relatively lower rates of financial exclusion compared to the region, Kaduna State can emerge as a regional leader in driving financial inclusion in the North West. However, concerted efforts need to be put in place to include the significant financially excluded population High rates of mobile phone ownership, even among excluded groups, provide an opportunity to drive financial inclusion by expanding access to affordable, relevant digital financial services. Support initiatives that bridge digital financial services infrastructure gaps in Kaduna - regulated non-bank institutions (such as agent network providers) can be leveraged to extend financial services to excluded. populations Promote the development and viability of digital financial services use cases in the State - e.g. introduce procurement criteria that encourage digitization and formalization of vendors, digitizing government payments at LGA level Prioritise the financial inclusion of women so as to maximize women's economic empowerment and other gender-oriented projects in the State Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 45#46EFINA Enhancing Financial Innovation & Access How to use the Access to Financial Services in Nigeria 2020 - Kaduna State Deep Dive Survey Data These Key Findings are just the tip of the iceberg. The dataset can be used for in-depth analysis of a variety of topics, including: Financial Inclusion Landscape • Financial behavior, including usage of digital financial services • Beyond Financial Inclusion - Financial health, needs and capabilities • • • The impact of the COVID-19 pandemic Demographic information and progress in line with Sustainable Development Goals Gender and financial inclusion Reports and datasets are available to the public at www.a2f.ng Contact [email protected] Website www.efina.org.ng www.a2f.ng Source: EFINA Access to Financial Services in Kaduna State 2020 Survey 46