This paper examines the inclusivity of financial services in Niger. The data examined indicate that Niger is behind other countries in the West African Economic and Monetary Union (WAEMU) in terms of access to financial services. Only 14 percent of the adult population of Niger accesses and uses formal financial services, such as those offered by commercial banks, e-money service providers and microfinance institutions (MFIs). The WAEMU country closest to Niger in terms of this metric is Mali, in which 55 percent of the populace is financially included.
The authors highlight the contraction of Niger’s MFI market as the key factor in explaining the country’s low utilization of financial services. MFI loans were used by 11 percent of the population in 2015 but only 5 percent by the end of 2021. Another factor is the gender gap in the use of financial services. Data from the World Bank indicate 11 percent of women in Niger have a bank account, while 20 percent of men do. Looking forward, e-money services are a largely untapped avenue that could enhance financial inclusion in the country.
In conclusion, the authors outline eight recommendations: (1) improve financial literacy education via primary and secondary schools; (2) accelerate the digitization of financial services; (3) promote women’s economic empowerment, including by closing the gender gap in financial inclusion; (4) enhance the oversight and supervision of Niger’s financial system; (5) reform the legal environment for MFIs to boost their viability and the accessibility of their services; (6) implement the Financial Inclusion Fund that was created in 2020 as part of Niger’s Financial Inclusion Strategy but is not yet operational; (7) revise the way banking is taxed, which the authors contend is inefficient as it now stands; and (8) seek ways to enhance the viability of small and medium-sized enterprises (SMEs).
This is a summary of a paper by Yoro Diallo, Arsène Kaho and Can Sever; published by the International Monetary Fund (IMF); January 2023; 14 pages; available at https://www.elibrary.imf.org/view/journals/002/2023/029/article-A004-en.xml.
By Vaughn Rajah, Research Associate
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