Microfinance without Banks: Women's Empowerment through Informal Savings Mechanisms in Kano State

ABSTRACT: This research explores how informal savings methods serve as alternatives to traditional microfinance in enhancing women's empowerment in Kano State, Nigeria. A mixed-methods strategy was employed, collecting data from 250 women participating in adashe, ajo, and thrift savings groups spanning five local government areas, alongside six focus group discussions (FGDs). Quantitative results obtained through paired-sample t-tests showed notable increases in average monthly income—from ₦18,500 prior to joining to ₦28,700 post-participation (p < 0.05)—and in household decision-making independence (from 34% to 61%). Qualitative insights indicated advancements in self-esteem, negotiation capabilities for business, and the capacity to fund education without spousal consent. Nonetheless, issues such as financial mismanagement, loan defaults, exclusion of the most impoverished women, and susceptibility to inflation were also noted. Grounded in Social Capital Theory and Empowerment Theory, the study concludes that informal savings groups create a culturally relevant, trust-based avenue for financial inclusion and socio-economic empowerment. Suggestions include integrating these groups with formal financial institutions through adaptable partnerships, enhancing governance through training, offering microinsurance products, and utilising digital platforms to promote greater transparency and security.