Agency Banking, Financial inclusion and deepening in Nigeria 2010-2025: Focusing on POS
DOI:
https://doi.org/10.5281/zenodo.23207900Keywords:
POS Agent Banking, Financial Deepening, Financial Inclusion, Nigeria, Central Bank of Nigeria, Agency Theory, Technology Acceptance Model.Abstract
This study examines the role of Point-of-Sale (POS) agent banking in deepening financial inclusion and expanding the financial system in Nigeria between 2010 and 2025. Despite significant policy interventions by the Central Bank of Nigeria (CBN) and the proliferation of agent banking networks, a large proportion of the Nigerian population remains financially excluded from formal services. Employing a mixed-methods research design, the study draws on secondary data from the CBN, National Bureau of Statistics (NBS), Enhancing Financial Innovation and Access (EFInA), and World Bank datasets, complemented by primary survey data from 400 respondents across six geopolitical zones. The study is anchored on the Financial Intermediation Theory, the Technology Acceptance Model (TAM), and the Agency Theory. Findings reveal that POS agent banking has significantly contributed to financial deepening through increased deposit mobilisation, credit access, transaction volumes, and geographic outreach, particularly in rural and peri-urban communities. However, challenges including network failures, fraud, liquidity constraints, low financial literacy, and inadequate regulatory enforcement continue to impede its potential. The study contributes original empirical evidence on the agent banking–financial deepening nexus in an emerging economy context and provides contextual policy recommendations for regulators, financial institutions, and development partners.
References
Aboelmaged, M., & Gebba, T. R. (2013). Mobile banking adoption: An examination of technology acceptance model and theory of planned behaviour. International Journal of Business Research and Development, 2(1), 35–50.
Adegbite, S. A., & Machethe, C. L. (2020). Bridging the financial inclusion gender gap in smallholder agriculture in Nigeria: An untapped potential for sustainable development. World Development, 127, 104812.
Adeyemi, A., Obafemi, F., & Ebire, K. (2023). Agent banking and financial inclusion in rural Nigeria: Evidence from North-Central geopolitical zone. Journal of Financial Regulation and Compliance, 31(2), 180–201.
Adeolu, I. (2014). Mobile money adoption in Nigeria: A survey of users in Lagos and Abuja. African Journal of Information Systems, 6(3), 101–118.
Aduda, J., & Kalunda, E. (2012). Financial inclusion and financial sector stability with reference to Kenya: A review of literature. Journal of Applied Finance and Banking, 2(6), 95–120.
Aghion, P., Howitt, P., & Mayer-Foulkes, D. (2005). The effect of financial development on convergence: Theory and evidence. Quarterly Journal of Economics, 120(1), 173–222.
Ajide, F. M. (2015). Financial innovation and sustainable development in selected countries in West Africa. Journal of Entrepreneurship, Management and Innovation, 11(1), 43–72.
Aker, J. C., & Mbiti, I. M. (2010). Mobile phones and economic development in Africa. Journal of Economic Perspectives, 24(3), 207–232.
Aker, J. C., Boumnijel, R., McClelland, A., & Tierney, N. (2016). Payment mechanisms and anti-poverty programs: Evidence from a mobile money cash transfer experiment in Niger. Economic Development and Cultural Change, 65(1), 1–37.
Alliance for Financial Inclusion (AFI). (2016). Maya Declaration: Progress report. AFI.
Asongu, S. A., & Nwachukwu, J. C. (2018). Mobile phone penetration, mobile banking and inclusive development in Africa. The African Finance Journal, 20(1), 48–74.
Beck, T., Demirguc-Kunt, A., & Levine, R. (2007). Finance, inequality and the poor. Journal of Economic Growth, 12(1), 27–49.
Berger, A. N., Schaeck, K., & Doran, M. (2021). Correspondent banking and financial deepening in Brazil. Journal of Banking & Finance, 129, 106164.
Bhattacharya, S., & Thakor, A. V. (1993). Contemporary banking theory. Journal of Financial Intermediation, 3(1), 2–50.
Cámara, N., & Tuesta, D. (2014). Measuring financial inclusion: A multidimensional index (BBVA Research Working Paper No. 14/26). BBVA Research.
Central Bank of Nigeria (CBN). (2012). National Financial Inclusion Strategy. CBN.
Central Bank of Nigeria (CBN). (2013). Regulatory framework for agent banking in Nigeria. CBN.
Central Bank of Nigeria (CBN). (2021). National Financial Inclusion Strategy: Revised 2019–2024. CBN.
Central Bank of Nigeria (CBN). (2024). Annual Report and Statement of Accounts 2023/2024. CBN.
Cochran, W. G. (1977). Sampling techniques (3rd ed.). John Wiley & Sons.
Creswell, J. W., & Clark, V. L. P. (2017). Designing and conducting mixed methods research (3rd ed.). Sage Publications.
Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319–340.
Demirguc-Kunt, A., & Levine, R. (2008). Finance and economic opportunity (World Bank Policy Research Working Paper No. 4468). World Bank.
Demirguc-Kunt, A., Klapper, L., Singer, D., & Ansar, S. (2018). The Global Findex Database 2017: Measuring financial inclusion and the fintech revolution. World Bank.
Diamond, D. W., & Dybvig, P. H. (1983). Bank runs, deposit insurance, and liquidity. Journal of Political Economy, 91(3), 401–419.
Diniz, E. H., Birochi, R., & Pozzebon, M. (2012). Triggers and barriers to financial inclusion: The use of ICT-based branchless banking in an Amazon county. Electronic Commerce Research and Applications, 11(5), 484–494.
Dupas, P., Karlan, D., Robinson, J., & Udry, C. (2018). Banking the unbanked? Evidence from three countries. American Economic Journal: Applied Economics, 10(2), 257–297.
Enhancing Financial Innovation and Access (EFInA). (2023). Access to financial services in Nigeria 2023 survey. EFInA.
Gurley, J. G., & Shaw, E. S. (1960). Money in a theory of finance. Brookings Institution.
Ibeachu, P. H. (2010). Comparative analysis of financial inclusion in Nigeria and Ghana: A case study approach. Newcastle Business School, Northumbria University.
Jack, W., & Suri, T. (2011). Mobile money: The economics of M-PESA (NBER Working Paper No. 16721). National Bureau of Economic Research.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behaviour, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Kikulwe, E. M., Fischer, E., & Qaim, M. (2014). Mobile money, smallholder farmers, and household welfare in Kenya. PLOS ONE, 9(10), e109804.
King, R. G., & Levine, R. (1993). Finance and growth: Schumpeter might be right. Quarterly Journal of Economics, 108(3), 717–737.
Klapper, L., & Singer, D. (2015). The opportunities of digitising payments (World Bank and Bill & Melinda Gates Foundation Report). World Bank.
Kumar, A., Nair, A., Parsons, A., & Urdapilleta, E. (2006). Expanding bank outreach through retail partnerships: Correspondent banking in Brazil (World Bank Working Paper No. 85). World Bank.
Lemo, T. (2007). Regulatory oversight and stakeholder protection: The case of bank consolidation in Nigeria. Paper presented at the BIS FSI High-Level Meeting on Banking Supervision, Cape Town.
Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35(2), 688–726.
Levine, R., Loayza, N., & Beck, T. (2000). Financial intermediation and growth: Causality and causes. Journal of Monetary Economics, 46(1), 31–77.
Mas, I., & Siedek, H. (2008). Banking through networks of retail agents (CGAP Focus Note No. 47). CGAP.
McKinnon, R. I. (1973). Money and capital in economic development. Brookings Institution.
Murthy, G. R. K., Murthy, M. J. U., & Bhatt, M. (2014). ICT for financial inclusion: India’s experience with business correspondents. Proceedings of the IRIS Annual Conference.
National Bureau of Statistics (NBS). (2024). Selected banking sector data 2024. NBS.
Nigeria Inter-Bank Settlement System (NIBSS). (2021). Industry report on electronic payments 2020. NIBSS.
Nigeria Inter-Bank Settlement System (NIBSS). (2024). NIBSS industry report 2023/2024. NIBSS.
Nwachukwu, J., & Egwaikhide, F. O. (2019). An error-correction model of the determinants of private saving in Nigeria. Journal of International Development, 19(8), 1127–1143.
Ogbuike, I., & Nkamnebe, A. D. (2024). Gender dimensions of POS agent banking adoption in rural Nigeria. African Journal of Marketing Management, 16(1), 1–15.
Oliveira, T., Faria, M., Thomas, M. A., & Popovic, A. (2014). Extending the understanding of mobile banking adoption: When UTAUT meets TTF and ITM. International Journal of Information Management, 34(5), 689–703.
Oluwaseun, A., & Adeniyi, A. (2022). Agent banking, fintech innovation and financial deepening in Nigeria. Cogent Economics & Finance, 10(1), 2101530.
Osei-Assibey, E. (2015). What drives behavioural intention of mobile money adoption? The case of rural consumers in Ghana. African Journal of Economic and Management Studies, 6(2), 200–217.
Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329–340.
Patrick, H. T. (1966). Financial development and economic growth in underdeveloped countries. Economic Development and Cultural Change, 14(2), 174–189.
Rajan, R. G., & Zingales, L. (1998). Financial dependence and growth. American Economic Review, 88(3), 559–586.
Robinson, J. (1952). The generalisation of the general theory. In The Rate of Interest and Other Essays. Macmillan.
Ross, S. A. (1973). The economic theory of agency: The principal’s problem. American Economic Review, 63(2), 134–139.
Sanford, C., & Cojocaru, L. (2013). Testing the business case for financial inclusion (CGAP Working Paper). CGAP.
Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613–628.
Schumpeter, J. A. (1912). The theory of economic development. Harvard University Press.
Shaw, E. S. (1973). Financial deepening in economic development. Oxford University Press.
Soludo, C. C. (2004). Consolidating the Nigerian banking industry to meet the development challenges of the 21st century. Address to the Special Meeting of the Bankers’ Committee, Abuja, July 6, 2004.
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the Technology Acceptance Model: Four longitudinal field studies. Management Science, 46(2), 186–204.
World Bank. (2012). Information and communication technology for greater development impact: World Bank Group strategy for ICT 2012–2015. World Bank.
World Bank. (2014). Global financial development report 2014: Financial inclusion. World Bank.
World Bank. (2022). The Global Findex Database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. World Bank.
World Bank. (2024). World development indicators 2024. World Bank.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Ibeanusi sylvanus Chigozie, Felicia A. Anyanwu (Author)
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors retain copyright. Licensed under the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. https://creativecommons.org/licenses/by/4.0/ (CC BY 4.0 deed)
