Governments around the world have been seriously grappling with what comprises an ideal public policy response to the COVID-19 pandemic. While scholarly literature and practice point to numerous policy adaptations and some high-level convergence in responses after several pandemic waves. Most prominent among these responses have been national shutdowns as well as compensating households and businesses with social protection programme grants, business loans, and tax payment holidays. With very little information documented about the gender dimensions of such programmes in societies dominated by a patriarchal system, it was refreshing to find that the Central Bank of Nigeria’s 50 billion Naira Targeted Credit Facility Grant emerged as a positive role model for inclusive COVID-19 response programmes for Africa and the developing world from a mobile owner and demand perspective.
The Federal Government of Nigeria imposed a 14-day lockdown at the end of March 2020, resulting in income losses for businesses, particularly micro-, small-and medium-scale enterprises (MSMEs), and individuals. To address this, the government also introduced a targeted loan scheme “for households and MSMEs that have been particularly hit hard by the pandemic” through its central bank. Using a representative and weighted 2021 phone survey of mobile phone owners in Nigeria [1], Research ICT Africa (RIA) finds that this targeted loan scheme successfully delivered more loan assistance to women-owned MSMEs and women (58.2%) versus male-owned MSMEs and men (42%) amongst phone owners that applied for and received the loan facility respectively (see the last two bars on the right in Figure 1 below).
A lower proportion of women mobile phone owners did not apply for the loan scheme (45.3% female phone owners versus 55% of the male phone owners respectively), nor receive the grant in comparison to their male counterparts (37.6% female phone owners versus 62% of the male phone owners respectively) despite making up a marginally smaller proportion of the phone-owning population (44.9% women and 55.1% men). More pointedly, RIA finds that a greater proportion of women than men mobile owners applied for and received the loan facility – public policy response to COVID-19 on the demand side. This infers a deliberate and positive selection bias towards women owned businesses and women in the CBN’s award of the loans on the supply side when in equilibrium.
The survey also finds that the loan facility was relatively more skewed toward business owners and the self-employed (48.8% of grant recipients when combined) as well as regular employees (32.7% of the loan recipients) (see Figure 2 above). This was, however, moderated by the applicant’s ability to supply the requisite supporting loan documentation to the CBN. This dual approach, where both business owners-self-employed and regular employees are supplied with targeted loans, is crucial for countries with a large informal economy and limited resource envelopes.
Delving more deeply into the data, RIA observes a strong correlation between education and applications, which affirms an established positive relationship between human development and digital literacy. Of the 9.3% of mobile phone owners that applied for the targeted facility in Nigeria, approximately 54% had a secondary or tertiary educational qualification—a higher proportion within gender happened to be women based on Figure 1 (inverse of first two of bars on the left).
Exploring the efficacy of the methods that people used to apply for the CBN credit facility, RIA found that of the total applicants who used the paper method to apply, only 5.4% were successful. A significant 94.6% of paper-based applications were unsuccessful. Similarly, with respect to those who applied via mobile phone, only 9% successfully received the facility, while 91% did not. A relatively higher percentage of recipients applied through a government website, with 11.9 percent applying and receiving the grant compared to 88.1 percent who did not. None of the applicants who used SMS, email, WhatsApp, social media, or other methods were approved for credit.
Of those who did not apply for the credit facility, lack of digital literacy and access to critical infrastructure such as mobile phones to access the government website and complementary electricity, particularly in the rural areas, were cited as key impediments to not applying and receiving the CBN credit facility.
The key insight for resource-constrained economies with large informal sectors such as Nigeria is to supply targeted MSME loan facilities that prioritize women, youth, and other marginalized groups that own businesses, and critically address the infrastructure bottlenecks to accessing these facilities by broadening the number of platforms available to apply for the COVID-19 response credit facilities and providing appropriate safety nets to those with little or no digital literacy.
This blog about the Nigerian case provides selected high-level insights into COVID 19 response outcomes from a demand-side perceptive and their interactions with digital, financial, and intersectional inequalities. Look out for the full Nigeria Phone-Survey Research Report to be published on the RIA website soon.
[1] Utilized random digit dialling (RDD) and a phone survey of 3024 respondents to collect the required data. The weighted data mirrored the mobile phone owning population from the RIA After Access Survey (2018).
* This research was conducted under the auspices of RIA’s Covid-19 Responses for Equity (CORE) Project.
