Empirical Analysis of the Relationship Between Cooperative Sector Development and Rural Financial Inclusion in Ogun State

Financial inclusion in rural Nigeria depends heavily on cooperative societies given the limited formal bank branch coverage in most rural communities. The empirical relationship between cooperative sector development and rural financial inclusion outcomes in South West Nigeria requires rigorous quantification. This study empirically analysed the relationship between cooperative sector development (measured by cooperative density, capital, and service variety) and rural financial inclusion in Ogun State. A multi-level quantitative analytical design was adopted, using community-level cooperative registry data and household survey data from 500 rural households in eight LGAs of Ogun State. Household-level financial inclusion was operationalised using account ownership, credit access, savings behaviour, and financial product diversity indicators. Cooperative sector development was measured at the LGA level through cooperative density per 1,000 population, total cooperative capital, and range of financial services offered. Multi-level regression controlling for household income, education, and distance to bank branch was employed. Results showed that LGA-level cooperative density was the strongest predictor of household-level financial inclusion after controls (beta = 0.44; p < 0.001), exceeding the effect of bank branch proximity. Each additional cooperative per 1,000 population was associated with a 6.8 percent increase in the probability of household financial account ownership. The study contributes empirical evidence on cooperative sector development as a financial inclusion driver, providing an analytical foundation for cooperative-centred rural financial inclusion policy in Ogun State. Keywords: financial inclusion, cooperative sector development, rural households, Ogun State, multi-level analysis