Financial Exclusion in Northern Nigeria: A Lesson From the Developed Countries

Tijjani Muhammad; Besar Bin Ngah; Al-Shaghdari Fahd Mohammed Obad

doi:10.47312/aifer.v7i01.565

Authors

Tijjani Muhammad Federal University, Gashua, Yobe State, Nigeri
Besar Bin Ngah Al-Madinah International University
Al-Shaghdari Fahd Mohammed Obad Al-Madinah International University

DOI:

https://doi.org/10.47312/aifer.v7i01.565

Keywords:

Financial Literacy Theory, Vulnerable Group Theory, Causes, Financial Exclusion

Abstract

The objective of this paper is to assess the causes of financial exclusion in northern Nigeria, including the reason and causes behind the accessibility to banking services at a competitive and affordable prices. The study adopted Confirmatory Factor Analysis under Structural Equation Modeling using vulnerable group theory (Religiosity and Poverty) and financial literacy theory (Awareness). In this study, the survey method was used, additionally, the stratified sampling technique is applied as it provides richness and accuracy of information from respondents from various stratums. The participants comprised senior, middle and lower classes for the study justification. The finding indicates the positive relationship between Vulnerable Group Theory and Financial Exclusion while Financial Literacy Theory has no relationship as indicated. Therefore, the vulnerability which is consists of Religiosity and Poverty drive as the major causes of Financial Exclusion in Nigeria. The research provided insights and developed a model that indicates the causes of financial exclusion and apparent barriers to better financial services and inclusion in the community and society. This study's originality shows that have not used such vulnerable group theory and financial literacy theory for justification.

Downloads

Download data is not yet available.

References

Affleck, A., & Mellor, M. (2006). Community development finance: a neo-market solution to social exclusion?. Journal of social policy, 35(2), 303-319.

Akpene Akakpo, A., Amidu, M., Coffie, W., & Abor, J. Y. (2022). Financial literacy, financial inclusion and participation of individual on the Ghana stock market. Cogent Economics & Finance, 10(1), 2023955.

Allen, J., & Farber, S. (2019). Sizing up transport poverty: A national scale accounting of low-income households suffering from inaccessibility in Canada, and what to do about it. Transport policy, 74, 214-223.

Anarfo, E. B., & Abor, J. Y. (2020). Financial regulation and financial inclusion in Sub- Saharan Africa: Does financial stability play a moderating role?. Research in International Business and Finance, 51, 101070.

Balasubramanian, S. A., Kuppusamy, T., & Natarajan, T. (2018). Financial inclusion and land ownership status of women. International Journal of Development Issues.

Beckmann, C. F., DeLuca, M., Devlin, J. T., & Smith, S. M. (2005). Investigations into resting-state connectivity using independent component analysis. Philosophical Transactions of the Royal Society B: Biological Sciences, 360(1457), 1001-1013

Bhatia, S., & Singh, S. (2019). Empowering women through financial inclusion: a study of urban slum. Vikalpa, 44(4), 182-197.

Carbo, S., Gardener, E. P., & Molyneux, P. (2005). Financial exclusion in Europe. In Financial exclusion (pp. 98-111). Palgrave Macmillan, London.

Carbo, S., Gardener, E.P.M. and Molyneaux, P. (2007), “Financial exclusion in Europe”, Public Money & Management, February, pp. 21-27

Damodaran, A. (2013). Financial inclusion: Issues and challenges. AKGEC International Journal of Technology, 4(2), 54-59

de la Cuesta-González, M., Paredes-Gazquez, J., Ruza, C., & Fernández-Olit, B. (2021). The relationship between vulnerable financial consumers and banking institutions. A qualitative study in Spain. Geoforum, 119, 163-176.

Devlin, J.F. and Wright, M. (1995), “The changing environment of financial services”, in Ennew, C., Wight, M. and Watkins, T. (Eds), Marketing Financial Services, 2nd ed., Heinemann, Oxford, pp. 1-32

Dinçer, N., Eichengreen, B., & Geraats, P. (2019). Transparency of monetary policy in the postcrisis world. The Oxford handbook of the economics of central banking, 287-336.

Drakeford, M., & Sachdev, D. (2001). Financial exclusion and debt redemption. Critical Social Policy, 21(2), 209-230.

Du, Q., Wu, N., Zhang, F., Lei, Y., & Saeed, A. (2022). Impact of financial inclusion and human capital on environmental quality: evidence from emerging economies. Environmental Science and Pollution Research, 1-13.

Dymski, G. and Li, W. (2003), “The macrostructure of financial exclusion: mainstream, ethnic, and fringe banks in money space”, Espace, Population Societies, 21. 1, 183-201.

Gardner Feldman, L. (1999). The principle and practice of ‘reconciliation’in German foreign policy: Relations with France, Israel, Poland and the Czech Republic. International Affairs, 75(2), 333-356.

Hutchinson, I. H. (2002). Principles of plasma diagnostics. Plasma Physics and Controlled Fusion, 44(12), 2603.

Irfan, M., Shahid, A. L., Ahmad, M., Iqbal, W., Elavarasan, R. M., Ren, S., & Hussain, A. (2022). Assessment of public intention to get vaccination against COVID‐ 19: Evidence from a developing country. Journal of Evaluation in Clinical Practice, 28(1), 63-73.

Joassart-Marcelli, P. and Stephens, P. (2010), “Immigrant banking and financial exclusion in Greater Boston”, Journal of Economic Geography, Vol. 10 No. 6, pp. 883-912.

Karliner, L. S., Hwang, E. S., Nickleach, D., & Kaplan, C. P. (2011). Language barriers and patient-centered breast cancer care. Patient education and counseling, 84(2), 223-228

Koku, P.S. (2015), "Financial exclusion of the poor: a literature review", International Journal of Bank Marketing, 33 No. 5, 654-668. https://doi.org/10.1108/IJBM-09-2014-0134

Kumar, R., & Pathak, D. C. (2022). Financial awareness: a bridge to financial inclusion. Development in Practice, 1-13.

Mair, J., Marti, I., & Ventresca, M. J. (2012). Building inclusive markets in rural Bangladesh: How intermediaries work institutional voids. Academy of Management Journal, 55(4), 819-850.

Malnight, T. W., Buche, I., & Dhanaraj, C. (2019). Put purpose at the core of your strategy. Harvard Business Review, 97(5), 70-78.

Mani, M. (2022). Financial Inclusion through Financial Literacy: Evidence, Policies, and Practices. International Journal of Social Ecology and Sustainable Development (IJSESD), 13(1), 1-12.

Marcelli, E. and Lowell, L. (2005), “Transnational twist: percuniary remittances and socioeconomic integration among authorized and unauthorized Mexican immigrants in Los Angeles County”, International Migration Review, 39 No. 1, 69-102.

McKillop, D.G., Ward, A.M. and Wilson J.O.S. (2007), “The development of credit unions and their role in tackling financial exclusion”, Public Money & Management, Vol. 27 No. 1, pp. 37-44.

Mohammed, Z., Ibrahim, U. A., & Muritala, T. A. (2022). Effect of Payments System Innovations on the Financial Performance of Commercial Banks in Nigeria. Journal of Service Science and Management, 15(1), 35-53.

Moser, L. and Park, E. (2004), Best Practices in Immigrant Lending, American Bankers Association, Washington, DC.

Muhammad, T., & bin Ngah, B. (2020). Modeling Debt And Equity Crowdfunding Based On Murabahah, Musharakah And Mudarabah: Trust And Awareness. Ikonomika: Jurnal Ekonomi dan Bisnis Islam, 5(2), 271-296.

Muhammad, T., & Khalil, Z. The Role of Islamic Banks in Tackling Financial Exclusion in North-East Nigeria, Turkish Journal of Islamic Economics, 8(1), 87-110

Muhammad, T., Dauda, S. A., & Bukar, A. (2022). Rural Electrification and Sustainable Planning of Sukuk Financing within the Isolated Communities in Nigeria: Using Investment and Blockchain Technology. Journal of Management and Economic Studies, 4(1), 30-46.

Nessén, M., Sellin, P., & Sommar, P. Å. (2018). The implications of an e-krona for the Riksbank’s operational framework for implementing monetary policy. Sveriges Riksbank Economic Review, 3, 29-42.

Neuman, S. B., & Dickinson, D. K. (Eds.). (2003). Handbook of early literacy research

Njambi, F. N. U., & Kariuki, P. W. O. (2018). Effect of mergers and acquisitions on financial performance of financial institutions in Kenya. International Academic Journal of Economics and Finance, 3(1), 64-79.

Orozco, M. (2004), “The remittance marketplace: prices, policy and financial institutions”, Pew Hispanic Center Report, Georgetown University Institute for the Study of International Migration, Washington, DC.

Pillai, R., & Williams, E. A. (2004). Transformational leadership, self‐efficacy, group cohesiveness, commitment, and performance. Journal of organizational change management.

Saha, M. and Dutta, K.D. (2022), "Revisiting financial inclusion-stability nexus: cross-country heterogeneity", Journal of Financial Economic Policy, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFEP-06-2021-0162

Sahay, M. R., von Allmen, M. U. E., Lahreche, M. A., Khera, P., Ogawa, M. S., Bazarbash, M., & Beaton, M. K. (2020). The promise of fintech: Financial inclusion in the post COVID-19 era. International Monetary Fund.

Schuetz, S., & Venkatesh, V. (2020). Blockchain, adoption, and financial inclusion in India: Research opportunities. International journal of information management, 52, 101936.

Shih, T. F., Chen, C. L., Syu, B. Y., & Deng, Y. Y. (2019). A cloud-based crime reporting system with identity protection. Symmetry, 11(2), 255.

Solo, M.T. (2008), “Financial exclusion in Latin America – or the social costs of not banking the urban poor”, Environment and Urbanization, Vol. 20 No. 1, pp. 47- 66.

Taylor, M. (2003), Public Policy in the Community, Palgrave Macmillan, Basingstoke.

Wilson, T. A. (2012). Supporting social enterprises to support vulnerable consumers: the example of community development finance institutions and financial exclusion. Journal of consumer policy, 35(2), 197-213.

Yoong, J. (2011). Financial illiteracy and stock market participation: Evidence from the RAND American Life Panel. Financial literacy: Implications for retirement security and the financial marketplace, 76.