Agent Banking and Poverty Alleviation: An Empirical Study from Nigeria

Uduak Joseph Akpabio, Sunday Akpan Ekere and Etieneobong Okopide Akpan

Abstract

Poverty remains a major socio-economic challenge in Nigeria despite several government interventions to promote financial inclusion. Many rural and low- income earners are grappling with lack of access to formal financial services and limited participation in economic activities. However, the impact to bridge the financial services gap between the banked, unbanked and underbanked through third-party agents is uncertain. This is where this study is motivated to examine the extent to which agent banking contributes to poverty alleviation in Nigeria. The study adopted ex post facto research design, while data was sourced from CBN statistical bulletins. The statistical technique was simple regression. Findings of the study have revealed that agent banking has no significant effect on human capital development. Similarly, the rising poverty profile of the people negates poverty reduction in the country. The study therefore, recommends that the Central Bank of Nigeria (CBN), in collaboration with the Nigerian Communications Commission (NCC), should regulate fees and charges imposed by telecom providers on agent banking transactions to curtail high cost that may discourage usage. Again, CBN should control processes, relationship and interest rates on loans by Fintech agency banking operators in Nigeria.Keywords: agent banking, poverty alleviation and human capital development, financial inclusion, automated teller machine.

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