DETERMINANTS OF BANKING CHOICE AMONG RURAL HOUSEHOLDS IN EKITI STATE, NIGERIA

Abstract

The banking choice of rural households has being noticed to be the informal banking method where they source for finance to improve their productivity and income. This has necessitated the study for the determinants of banking choice among rural households in Ekiti State. One hundred and twenty respondents were randomly selected in the study area. Descriptive statistics was used to describe the socio-economic characteristics of rural households while probit regression analysis was used to analyze the relationship between the socio-economic characteristics and the choice of banking methods. The results showed that the mean age was 48.9 years, the majority of the respondents were female (76.7%) with relatively high household size (6-12). As a State known for academic excellence, high literacy rate (91%) was recorded. Most (48.4%) of them engaged in trading of agricultural produce. The main method of banking in the area was the informal mainly the daily collectors (Alajos). It was recorded that rural households saving was low. From the probit analysis, it was gathered that the determinants of the choice of banking choice were household size, years of formal education, amount saved and income. Based on the results of this study recommendations were suggested in order to enable rural households make proper banking decisions, some are- government should invest more on social infrastructure, quality birth control, macroeconomic policies aimed at reducing consumption price index.