Publication: From Collateral to Cashflow: Expanding Access to Finance for Nigeria’s Female Business Owners
Loading...
Date
2024-04-15
ISSN
Published
2024-04-15
Editor(s)
Abstract
Women in Nigeria are starting and growing businesses at a remarkable rate offering a vast untapped market for business lending. The World Bank, through its Nigeria Women Entrepreneurs Finance Initiative (We-Fi), partnered with the Development Bank of Nigeria (DBN) and two commercial banks in Nigeria – Access Bank and Sterling Bank – to develop innovative credit solutions that expand access to finance for women entrepreneurs. This case study summarizes key lessons from this work, including an initial diagnostic; an assessment of demand for business loans; analysis of SMEs who applied to and/or received Access Bank cashflow loans; and administrative data from Access Bank’s cashflow loan program. Our objective is to provide insights into the successes and challenges of disbursing loans to women-led SMEs (WSMEs) in Nigeria. This research is being conducted in partnership with the World Bank’s Africa Gender Innovation Lab (GIL), which is also carrying out an impact evaluation that will capture how cashflow-based lending impacts male- vs female-led firms’ access to credit and business performance.
Link to Data Set
Citation
“Gruver, Ariel; Koroknay-Palicz, Tricia; Papineni, Sreelakshmi; Shaikh, Sarmad; Zottel, Siegfried. 2024. From Collateral to Cashflow: Expanding Access to Finance for Nigeria’s Female Business Owners. © World Bank. http://hdl.handle.net/10986/41416 License: CC BY-NC 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Fertility Impacts of Development Programs(Washington, DC: World Bank, 2024-07-17)This paper examines how women’s fertility responds to increases in their earnings and household wealth, using six experiments conducted in Sub-Saharan Africa. Contrary to predictions that an increase in female earnings raises the opportunity cost of childbearing and that this will lower fertility, the findings show that an increase in the profits of female business-owners in Ethiopia and Togo results in them having more children. The findings also show a positive fertility response to increases in the value of household assets induced by land formalization programs in Benin and Ghana. These results are driven by women who are in most need of sons for support in old age or in the event of widowhood. The findings suggest that women’s lack of long-term economic security is an important driver of fertility in Sub-Saharan Africa.Publication The Limits of Commitment(World Bank, Washington, DC, 2018-10)Working with a private bank in Ghana, this study examines the impacts of a commitment savings product designed to help clients taking repeated overdrafts break their debt cycles. Overall, the product significantly increased savings with the bank without increasing overdrafts. However, after accounting for other sources of savings, the study finds that clients with above-median baseline overdraft histories do not accrue new savings during the commitment period. Rather, they draw down other savings to offset the committed amount and take on new debt. In contrast, individuals with below-median overdraft histories significantly increase savings during and after the commitment period.Publication Sex, Lies, and Surveys(World Bank, Washington, DC, 2019-02)This paper examines how easily observable interviewer characteristics, such as gender and physical attractiveness, and more difficult to observe characteristics, such as attitudes and beliefs, affect adolescent girls' disclosure of sexual behavior during a baseline survey for an adolescent girls program in Liberia. The study finds that girls are more likely to report sexual activity to better-looking interviewers, and less likely to do so to interviewers holding more discriminatory gender attitudes and greater expectations about the program. The study finds no evidence that the gender of the interviewer matters.Publication Evening the Credit Score? Impact of Psychometric Loan Appraisal for Women Entrepreneurs(World Bank, Washington, DC, 2022-11)Women’s lower rates of ownership of collateralizable assets are a constraint to accessing larger business loans. This paper tests the impact of using psychometric credit scoring as a substitute for collateral for loans up to US$7,500, via a randomized controlled trial with a microfinance institution in Ethiopia. The paper finds positive impacts on women’s access to credit, and survival of their firms during the COVID-19 pandemic and conflict. Firms that remained operational were profitable; but there is limited evidence of impact on firm growth under these circumstances. The study showcases the potential for using innovative technologies to extend entrepreneurial finance to underserved markets.Publication Assessing Workplace Social, Emotional, and Behavioral Skills in Africa(Washington, DC: World Bank, 2025-05-21)Social, emotional, and behavioral skills are critical for success across life domains, yet research is constrained by a lack of internationally validated measures for adult populations. Existing tools often assess isolated skills and are predominantly validated in Western, school- aged samples. To address these limitations, this study developed and validated the Effective Socio-emotional skills To gain Economic EMpowerment framework, comprising 14 distinct social, emotional, and behavioral skills with prior demonstrated relevance to economic outcomes. The framework’s self-report scales were tested among adults in six Sub-Saharan African countries (Côte d’Ivoire, Nigeria, the Republic of Congo, Rwanda, South Africa, and Tanzania), spanning diverse cultural and linguistic contexts (English, French, Hausa, Swahili, and Yoruba). The results confirm the psychometric validity of the scales, supporting their utility in both research and practice. The framework categorizes skills as intrapersonal or interpersonal, awareness or management, and agentic or communal, providing a robust tool to unpack which skills matter for employment and earnings and how this differs by gender. By enabling exploration of social, emotional, and behavioral skills in underrepresented and cross-cultural contexts, use of the Effective Socio-emotional skills To gain Economic EMpowerment self-report scales advances theoretical and practical understanding of social, emotional, and behavioral skills in adult populations.
Users also downloaded
Showing related downloaded files
Publication Digital Progress and Trends Report 2023(Washington, DC: World Bank, 2024-03-05)Digitalization is the transformational opportunity of our time. The digital sector has become a powerhouse of innovation, economic growth, and job creation. Value added in the IT services sector grew at 8 percent annually during 2000–22, nearly twice as fast as the global economy. Employment growth in IT services reached 7 percent annually, six times higher than total employment growth. The diffusion and adoption of digital technologies are just as critical as their invention. Digital uptake has accelerated since the COVID-19 pandemic, with 1.5 billion new internet users added from 2018 to 2022. The share of firms investing in digital solutions around the world has more than doubled from 2020 to 2022. Low-income countries, vulnerable populations, and small firms, however, have been falling behind, while transformative digital innovations such as artificial intelligence (AI) have been accelerating in higher-income countries. Although more than 90 percent of the population in high-income countries was online in 2022, only one in four people in low-income countries used the internet, and the speed of their connection was typically only a small fraction of that in wealthier countries. As businesses in technologically advanced countries integrate generative AI into their products and services, less than half of the businesses in many low- and middle-income countries have an internet connection. The growing digital divide is exacerbating the poverty and productivity gaps between richer and poorer economies. The Digital Progress and Trends Report series will track global digitalization progress and highlight policy trends, debates, and implications for low- and middle-income countries. The series adds to the global efforts to study the progress and trends of digitalization in two main ways: · By compiling, curating, and analyzing data from diverse sources to present a comprehensive picture of digitalization in low- and middle-income countries, including in-depth analyses on understudied topics. · By developing insights on policy opportunities, challenges, and debates and reflecting the perspectives of various stakeholders and the World Bank’s operational experiences. This report, the first in the series, aims to inform evidence-based policy making and motivate action among internal and external audiences and stakeholders. The report will bring global attention to high-performing countries that have valuable experience to share as well as to areas where efforts will need to be redoubled.Publication Global Economic Prospects, January 2024(Washington, DC: World Bank, 2024-01-09)Note: Chart 1.2.B has been updated on January 18, 2024. Chart 2.2.3 B has been updated on January 14, 2024. Global growth is expected to slow further this year, reflecting the lagged and ongoing effects of tight monetary policy to rein in inflation, restrictive credit conditions, and anemic global trade and investment. Downside risks include an escalation of the recent conflict in the Middle East, financial stress, persistent inflation, weaker-than-expected activity in China, trade fragmentation, and climate-related disasters. Against this backdrop, policy makers face enormous challenges. In emerging market and developing economies (EMDEs), commodity exporters face the enduring challenges posed by fiscal policy procyclicality and volatility, which highlight the need for robust fiscal frameworks. Across EMDEs, previous episodes of investment growth acceleration underscore the critical importance of macroeconomic and structural policies and an enabling institutional environment in bolstering investment and long-term growth. At the global level, cooperation needs to be strengthened to provide debt relief, facilitate trade integration, tackle climate change, and alleviate food insecurity.Publication The Container Port Performance Index 2023(Washington, DC: World Bank, 2024-07-18)The Container Port Performance Index (CPPI) measures the time container ships spend in port, making it an important point of reference for stakeholders in the global economy. These stakeholders include port authorities and operators, national governments, supranational organizations, development agencies, and other public and private players in trade and logistics. The index highlights where vessel time in container ports could be improved. Streamlining these processes would benefit all parties involved, including shipping lines, national governments, and consumers. This fourth edition of the CPPI relies on data from 405 container ports with at least 24 container ship port calls in the calendar year 2023. As in earlier editions of the CPPI, the ranking employs two different methodological approaches: an administrative (technical) approach and a statistical approach (using matrix factorization). Combining these two approaches ensures that the overall ranking of container ports reflects actual port performance as closely as possible while also being statistically robust. The CPPI methodology assesses the sequential steps of a container ship port call. ‘Total port hours’ refers to the total time elapsed from the moment a ship arrives at the port until the vessel leaves the berth after completing its cargo operations. The CPPI uses time as an indicator because time is very important to shipping lines, ports, and the entire logistics chain. However, time, as captured by the CPPI, is not the only way to measure port efficiency, so it does not tell the entire story of a port’s performance. Factors that can influence the time vessels spend in ports can be location-specific and under the port’s control (endogenous) or external and beyond the control of the port (exogenous). The CPPI measures time spent in container ports, strictly based on quantitative data only, which do not reveal the underlying factors or root causes of extended port times. A detailed port-specific diagnostic would be required to assess the contribution of underlying factors to the time a vessel spends in port. A very low ranking or a significant change in ranking may warrant special attention, for which the World Bank generally recommends a detailed diagnostic.Publication Global Economic Prospects, January 2025(Washington, DC: World Bank, 2025-01-16)Global growth is expected to hold steady at 2.7 percent in 2025-26. However, the global economy appears to be settling at a low growth rate that will be insufficient to foster sustained economic development—with the possibility of further headwinds from heightened policy uncertainty and adverse trade policy shifts, geopolitical tensions, persistent inflation, and climate-related natural disasters. Against this backdrop, emerging market and developing economies are set to enter the second quarter of the twenty-first century with per capita incomes on a trajectory that implies substantially slower catch-up toward advanced-economy living standards than they previously experienced. Without course corrections, most low-income countries are unlikely to graduate to middle-income status by the middle of the century. Policy action at both global and national levels is needed to foster a more favorable external environment, enhance macroeconomic stability, reduce structural constraints, address the effects of climate change, and thus accelerate long-term growth and development.Publication Global Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-10)The global economy is facing another substantial headwind, emanating largely from an increase in trade tensions and heightened global policy uncertainty. For emerging market and developing economies (EMDEs), the ability to boost job creation and reduce extreme poverty has declined. Key downside risks include a further escalation of trade barriers and continued policy uncertainty. These challenges are exacerbated by subdued foreign direct investment into EMDEs. Global cooperation is needed to restore a more stable international trade environment and scale up support for vulnerable countries grappling with conflict, debt burdens, and climate change. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience. To accelerate job creation and long-term growth, structural reforms must focus on raising institutional quality, attracting private investment, and strengthening human capital and labor markets. Countries in fragile and conflict situations face daunting development challenges that will require tailored domestic policy reforms and well-coordinated multilateral support.