Determinants of Financial Exclusion in Kano State, North West Region of Nigeria

Abstract

Financial exclusion indicates the rate at which financial services are not reachable or patronized by certain groups of individuals or business enterprises. Perceived benefits derived from use of financial services leads to reduction in level of financial exclusion. Determinants of financial exclusion covered by this study include; age barrier, income level, qualification level and perception attached to the use of financial services. All the variables are having impact on the level of financial exclusion in Kano state. For the purpose of this study, a survey questionnaire was administered to 320 respondents from various local governments of the state. A simple random sampling technique was used as the total population is not known. A PLS-SEM approach was used in analyzing the data. Usage of financial services is positively impacting the financial exclusion of the respondents. Age has less significant impact on financial exclusion. Concurrently, income level and qualification level have a strong positive relationship in determining the level of financial exclusion of the respondents. Suggestions were made on increasing awareness level, introduction of financial services that are relevant and affordable to the respondents, boosting economic activities and introduction of credit facilities with low interest rate. Further studies are needed to seek more robust findings based on introducing variables like; religion, cultural influences, entrepreneurial attitudes and possibility of sourcing data from managers of financial institutions to make more findings in future studies.