Nigeria’s quest for sustainable economic growth may not require the discovery of a new natural resource or the creation of another government agency. The answer may have already been found in the thousands of markets, streets, kiosks, villages and neighbourhoods across the country where millions of hardworking women engage daily in small-scale commercial activities that sustain families and communities. Women are among the most productive wealth creators in Nigeria. From market traders and vegetable sellers to hawkers, pepper grinders, food vendors, shop owners and cottage industry operators, women form the backbone of the informal economy. Their contributions often go unnoticed in official statistics, yet they play a critical role in household income generation, poverty reduction and national economic development.
Across Nigeria, women wake up before dawn to purchase goods, prepare products, travel to markets and serve customers. Many use the proceeds from these activities to feed families, pay school fees, settle medical bills and support community development initiatives. In numerous households, women are either the primary breadwinners or significant contributors to family welfare. Even where husbands provide the major income, women frequently supplement household resources through their businesses.
One remarkable characteristic consistently observed in microfinance and commercial lending is that women generally exhibit lower loan default rates than men. Several studies across developing economies have shown that women tend to be more prudent borrowers, more disciplined in financial management and more committed to loan repayment. Their businesses may be smaller in size, but they are often managed with greater caution and accountability.
Women are naturally inclined towards thrift and prudent resource management. The traditional market woman who carefully manages inventory, reinvests profits and maintains customer relationships demonstrates entrepreneurial qualities that many formal business owners could emulate. These attributes make women ideal candidates for targeted financial inclusion programmes.
Unfortunately, millions of Nigerian women remain outside the formal banking system. Many operate entirely in cash, have no bank accounts, lack access to credit and possess limited financial records. This exclusion not only limits their business growth but also deprives the national economy of significant productive capacity. Bringing more women into the banking and financial system would create powerful multiplier effects. Increased access to savings accounts, digital payments, insurance and affordable credit would enable women to expand their businesses, employ additional workers and increase household incomes. Improved financial inclusion would also strengthen the capacity of financial institutions to mobilise deposits and channel resources into productive sectors.
To achieve this objective, the Central Bank of Nigeria (CBN) should consider policies that require Deposit Money Banks (DMBs) and Microfinance Banks (MFBs) to allocate a specific percentage of their annual loan portfolios to women-owned businesses. Such facilities should attract concessionary interest rates and simplified access requirements, particularly for women operating micro and small enterprises. Special consideration could be extended to different categories of women entrepreneurs. For example, unmarried women striving to establish economic independence could benefit from start-up support programmes. Married women with school-age children could receive preferential financing designed to help sustain their businesses while meeting educational obligations. Widows and women in rural communities could be given additional support through targeted intervention schemes.
Nigeria has experimented with women-focused development programmes in the past. During the administration of General Ibrahim Babangida, the Better Life Programme for Rural Women, championed by the late Mrs. Maryam Babangida, sought to empower rural women through cooperatives, skills acquisition and income-generating activities. The initiative attracted widespread attention and demonstrated the transformative potential of organised support for women. Subsequently, the People’s Bank of Nigeria, established under the leadership of the late Tai Solarin, was created to provide financial services to low-income Nigerians who lacked access to conventional banking. The institution embodied many principles associated with financial inclusion and grassroots development. However, policy inconsistencies and changing priorities over the years resulted in the dilution or discontinuation of several promising initiatives.
The discussion on women and financial inclusion naturally leads to the original philosophy behind microfinance. The modern microfinance movement was popularised by Muhammad Yunus of Bangladesh through the Grameen Bank model. Yunus recognised that poor people, especially women, possessed entrepreneurial abilities but lacked access to capital. Instead of demanding traditional collateral, the Grameen model relied on group lending, peer accountability and community trust. The results were extraordinary. Millions of poor women gained access to finance, established businesses, improved family welfare and lifted themselves out of poverty. The success of the model rested on several factors, including affordable loans, strong community engagement, flexible repayment structures, financial literacy and a development-oriented rather than purely profit-oriented approach.
Nigeria adopted the microfinance banking framework with the expectation that it would stimulate grassroots economic development. Unfortunately, many Nigerian MFBs have gradually drifted away from the original vision that inspired microfinance. Rather than focusing primarily on poverty alleviation and microenterprise development, many institutions now operate under conditions that resemble conventional commercial banking. High operating costs, inflationary pressures, stringent regulatory requirements and the pursuit of profitability have contributed to rising lending rates. As a result, many microfinance loans have become too expensive for the very people they were intended to serve. Small traders and informal sector operators often struggle to meet repayment obligations when interest rates consume a substantial portion of business profits.
Furthermore, many micro and small enterprises face significant record-keeping challenges. Most market women and small business operators do not maintain formal accounts, audited statements or detailed financial records. Prudential guidelines and lending criteria that assume the existence of sophisticated documentation may therefore exclude deserving borrowers.
To restore the developmental impact of microfinance in Nigeria, several modifications are necessary. Regulatory frameworks should become more responsive to grassroots realities. Financial institutions should be encouraged to develop alternative credit assessment models that consider business cash flows, cooperative membership, transaction history and community reputation. Financial literacy and bookkeeping support should accompany credit provision. Technology-driven solutions can also help informal businesses create transaction records that improve creditworthiness over time. Most importantly, lending rates must become more affordable if microfinance is to fulfil its intended purpose.
Women remain one of Nigeria’s greatest untapped economic assets. Supporting their businesses is not merely a social welfare initiative; it is an economic growth strategy. Every naira invested in a hardworking market woman, food vendor, trader or rural entrepreneur generates benefits that extend beyond the individual borrower to families, communities and the wider economy. A nation that deliberately empowers its women entrepreneurs creates stronger households, healthier communities and a more resilient economy. By expanding financial inclusion, reforming microfinance and providing targeted support for women-led enterprises, Nigeria can unlock a powerful engine of sustainable development and shared prosperity.
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