Role of Agency Banking in Promoting Financial Inclusion in Rural Communities of Benue State

Agency banking has emerged as a critical delivery model for extending formal financial services to rural and underserved populations in North Central Nigeria, where traditional bank branch penetration remains low. This study investigates the role of agency banking in promoting financial inclusion among rural communities in Benue State. A descriptive survey design was adopted, with data collected from 350 agency banking users and non-users in Gboko, Otukpo, and Makurdi Local Government Areas using structured questionnaires and focus group discussions. Financial inclusion was measured along dimensions of account ownership, savings mobilisation, credit access, and payment service usage. Chi-square tests and binary logistic regression analysis were employed to assess the association between agency banking participation and financial inclusion indicators. Results showed that agency banking users were 3.8 times more likely to have a formal savings account compared to non-users (OR = 3.8, 95% CI: 2.4 to 5.9). Payment service usage was the most common activity reported by 78% of agency banking users. Access to credit through agency banking was limited, with only 19% of users reporting loan product awareness. The study concludes that agency banking significantly advances account ownership and payment inclusion but falls short in credit delivery in rural Benue State. It recommends that the Central Bank of Nigeria expand agency banking product licensing to include simplified credit products targeted at rural farmers and small traders.

Keywords: agency banking, financial inclusion, rural communities, Benue State, North Central Nigeria