Food security for Nigeria’s 200 million people relies on Nigeria small-scale farmers. Despite their importance most struggle to accumulate savings and capital, invest in economic opportunities, adopt technologies to boost production and mitigate risks and build resilience to shocks.

This points to the need to ensure that they can access and use affordable formal financial services – what’s known as financial inclusion.

A great many Nigerians don’t have access to even basic formal financial services. A government document put out in 2018 reported that just over 58% of Nigeria’s 96.4 million adults were financially included in 2016. Just under 40% were banked, 10% were served by other formal institutions and nearly 10% were served by informal service providers.

A great deal of research has been done on financial inclusion in countries across the globe. But there’s a high level of disagreement about what should be measured, and how it should be measured. One of the big gaps is that financial inclusion rankings have limited evidence on specific target groups, particularly marginalised ones.

In our paper we set out to establish what the situation was among Nigeria small-scale farmers. Our study revisited the issue of what should be measured. Our starting premise was that owning a formal account doesn’t cut it because it doesn’t guarantee the kind of inclusion needed to ensure a safer and more secure financial future.

We adopted a multidimensional financial inclusion index for this group. The study was survey based with the aim of determining the level of financial inclusion among rural Nigeria small-scale farmers. It was also designed to help identify areas for policy interventions.

The results indicated that 78% of rural small-scale farmers in Nigeria were financially excluded based on the broader definition. We also found that just over 27% were adequate in the access indicator – those owning formal accounts – but only 25% frequently used formal financial services. Likewise, only one-third (31%) reported not having barriers like high transaction costs, lack of identification and distance in financial participation.

Overall, we found that most rural small-scale farmers in Nigeria were least capable relative to financial well-being and participation.

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