Internet access and employment shape women’s digital financial participation in Nigeria

Nigeria's digital finance boom has not eradicated the gender gap in financial participation, with new research finding that women's lower use of digital accounts and payments is largely tied to unequal access to internet connectivity, employment and income rather than clear evidence of different financial behavior. The study by Abdelhalem Mahmoud Shahen and Mesbah Fathy Sharaf argues that closing Nigeria's digital financial divide will require policies that go beyond expanding fintech tools and address the deeper economic and infrastructure barriers that limit women's participation.

The research paper, titled Digital Financial Inclusion and Gender Inequality: Structural Drivers and Financial Participation Gaps in Nigeria, was published in the Journal of Risk and Financial Management. Using nationally representative microdata from the 2025 Global Findex survey, the study analyzes three stages of digital financial inclusion in Nigeria: digital account ownership, use of any digital payment and merchant digital payments, finding that between 79% and 94% of observed gender gaps are statistically attributable to differences in socioeconomic and digital-access characteristics.

Nigeria's digital finance growth has not closed gender gaps

Nigeria has become one of sub-Saharan Africa's most dynamic digital financial markets, supported by rising mobile penetration, fintech expansion, regulatory reforms and rapid growth in electronic payments. Digital financial services have expanded access to formal finance in a country where physical banking infrastructure remains uneven, especially across rural and low-income communities. But the study finds that the surge in digital transactions has not automatically translated into equal participation.

Access does not necessarily mean use, the authors point out. A person may own a digital account or mobile phone but still remain excluded from regular digital payments, merchant transactions or meaningful financial participation. This difference between formal access and active use is central to the study's argument. Nigeria's digital transformation has created more entry points into finance, but the benefits remain filtered through existing inequalities in employment, income, education and internet access.

The findings show clear raw gender gaps. Digital account ownership is reported by 61.9% of men compared with 44.4% of women. Use of any digital payment stands at 63.1% among men and 45.9% among women. Merchant digital payments, a more advanced measure of participation in the digital economy, are reported by 33.8% of men and 23% of women. These figures show that women remain less likely to participate across all three stages of digital finance.

The same descriptive data show why the gap exists. Women in the sample are more likely to be concentrated in lower income groups, less likely to be employed and less likely to have internet access. Internet access is reported by 44.7% of men compared with 30.7% of women. Employment is reported by 79.8% of men and 65% of women. These differences are not minor background details. They shape whether people have the tools, income flows and transaction needs required to participate in digital finance.

The study's key question is whether women participate less because of gender-specific behavioral responses or because they face unequal access to the resources needed to use digital financial services. The authors use logit and probit models, interaction analysis and nonlinear Fairlie decompositions to distinguish between these explanations. Their results show that once socioeconomic characteristics and digital access are taken into account, the female coefficient becomes small and statistically insignificant across the main models.

That finding does not mean gender inequality is absent. Instead, it means the observed gender gap is largely explained by measurable structural disadvantages. Women are not shown to be less willing or less responsive to digital finance after accounting for education, income, employment and connectivity. Rather, they are less likely to possess the enabling conditions that make digital finance usable.

This is an important shift for policy. If the gap were mainly behavioral, financial education or gender-targeted product messaging might be the main solution. But if the gap is structural, the solution must include wider internet access, stronger labor market inclusion, improved income opportunities and products that respond to women's actual economic lives. The study therefore challenges narrow financial inclusion strategies that focus on account ownership or digital transaction volumes without examining who is truly able to participate.

Internet access and employment emerge as decisive factors

The study finds that digital connectivity is one of the strongest predictors of financial participation in Nigeria. Internet access is associated with increases of roughly 25 to 30 percentage points in the probability of digital financial participation across the study's outcomes. Mobile phone ownership also has a strong association with digital account ownership and digital payments. This shows that the digital divide remains a major financial divide.

Internet access is associated with a nearly 30 percentage-point increase in the predicted probability of making merchant digital payments. This matters because merchant payments signal a deeper level of integration into the digital economy than simply owning an account. They reflect the ability to use digital finance for everyday transactions, purchases and participation in commercial networks.

Employment is another major factor. The study finds that being employed is associated with a 14 to 15 percentage-point higher probability of digital engagement across different stages. Employment creates regular income flows, increases the need for payments and transfers, and connects individuals to formal or semi-formal economic activity. For women, labor market attachment appears especially important. Gender-specific models show that employment has a larger association with women's digital account ownership and payment use than with men's in several specifications.

Education also matters, though the study finds no clear evidence that education operates differently by gender in the interaction models. Secondary and tertiary education are positively associated with digital financial participation. Education can improve confidence, literacy, platform navigation and ability to evaluate digital services. However, the authors caution that education alone is not a distinct gender-specific corrective channel in the sample. It supports participation as part of a broader set of opportunities.

Income plays a role as well, particularly at earlier stages of digital participation. Higher-income individuals are more likely to own digital accounts and use digital payments. But income effects weaken for advanced merchant payment use once other characteristics such as employment and connectivity are included. This suggests that digital participation depends not only on ability to pay, but also on infrastructure, work status and the practical need to transact.

The Fairlie decomposition results strengthen the structural interpretation. For digital account ownership, the gender gap is 11.8 percentage points, with about 81% explained by observable characteristics. For any digital payment use, the gap is 12.6 percentage points, with about 79% explained. For merchant digital payments, the gap is 8.9 percentage points, with about 94% explained. Internet access and labor market participation emerge as among the most important contributors.

Notably, the authors do not dismiss the unexplained part of the gap. For digital account ownership and any digital payment use, the unexplained components remain 2.3 and 2.7 percentage points respectively. In a country the size of Nigeria, even small percentage-point gaps can represent large numbers of adults. These residual differences may reflect factors not captured in the Global Findex data, such as social norms, trust in digital platforms, control over household finances, product design, intra-household bargaining power, safety concerns, consumer protection or differences in financial autonomy.

The study, hence, presents a nuanced view. Observable structural factors explain most of the measured gender gap, but not every barrier. Gender inequality in digital finance is not reduced to a simple question of internet access. Connectivity is necessary, but it works alongside employment, income, education, trust and institutional design. Without those supporting conditions, digital finance can expand while still reproducing existing inequalities.

The rural and urban robustness checks add another layer. The female coefficient remains statistically insignificant in urban models across all three outcomes. In rural models, it is negative for all outcomes and statistically significant at the 10% level only for digital account ownership. This suggests that rural women may still face location-specific constraints at the account ownership stage. The authors warn that subgroup estimates are less precise because the sample is smaller, but the result points to the need for place-sensitive policy.

Digital inclusion needs economic agency, not just fintech access

Nigeria cannot close the gender gap in digital financial inclusion by expanding financial technology alone. More accounts, apps and payment platforms may raise national inclusion indicators, but they will not guarantee equal participation if women remain less connected, less employed and more concentrated in lower income groups.

Regulators must move financial inclusion strategies beyond headline account ownership targets and measure actual use of digital financial services by gender, income and location. Merchant payments and regular digital transactions provide a deeper view of participation than account ownership alone. A narrow focus on access can create the appearance of progress while leaving the use gap unresolved.

For banks and fintech firms, the study points to the need for products that reduce onboarding barriers and respond to women's transaction needs. Low-income users may need simpler interfaces, lower transaction costs, stronger fraud protection and clearer dispute-resolution mechanisms. Women who face limited control over household finances may require products designed with privacy, security and autonomy in mind. Trust in platforms is also critical, especially where users have limited experience with formal financial systems.

Affordable internet access remains crucial for digital inclusion programs. Expanding connectivity, especially for women and rural users, could have large effects on digital finance participation. But internet access must be paired with financial literacy, consumer protection and support for meaningful use. A connected user who lacks income, employment, trust or control over financial decisions may still remain only partially included.

For labor market policy, the study suggests that women's employment is not separate from digital finance. It is one of the channels through which inclusion deepens. Strengthening women's access to work, income-generating activities and formal or platform-based economic participation may be one of the most effective ways to increase their use of digital accounts and payments. In this framing, digital financial inclusion becomes part of a wider economic empowerment agenda.

Additionally, digital finance is often presented as a leapfrogging tool that can bypass weak physical banking infrastructure. The Nigerian evidence suggests a more cautious interpretation. Digital systems can reduce some barriers, but they do not automatically overcome social and economic inequality. Instead, they may mirror the distribution of existing resources. Those with jobs, income, phones and internet access are better positioned to benefit. Those without those resources remain at risk of exclusion.

The authors also warn against treating digital participation as a one-stage outcome. Account ownership, any payment use and merchant payments represent different levels of engagement. A person may enter the digital financial system through an account but not use it regularly. Another may use basic transfers but not participate in merchant transactions. Policy needs to recognize these stages and identify where different groups fall out of the system.

As for the study limitations, the data are cross-sectional, meaning the analysis cannot prove causality. Employment may increase digital payment use, but digital financial access may also support income-generating activity. Internet access may enable digital payments, but financially active people may be more likely to invest in connectivity. The findings should therefore be interpreted as conditional associations, not one-way causal effects.

The sample size also limits precision in subgroup and interaction models. The Nigeria-only focus means the findings should not be applied mechanically to other African countries, where labor markets, fintech systems, mobile money ecosystems and social norms may differ. The Global Findex data also cannot directly measure some of the deeper mechanisms that may shape women's financial participation, including household bargaining, trust, autonomy and social restrictions.