Financial Inclusion and Rural Entrepreneurship: Demand-Side Review of Central Bank of Nigeria Programmes for Small and Medium-Sized Enterprises

Abstract

Entrepreneurship in Nigeria has long been practiced as small businesses in subsistence mode due to the lack of adequate essential factors of production required for its practice compared to counterparts in developed countries. Lack of access to conventional financial institutions and services has also slowed the growth of entrepreneurship in the country. This study reviewed the Central Bank of Nigeria’s (CBN’s) programmes to increase the financial inclusion of rural business dwellers who are yet to be properly banked. The research used a qualitative methodology to explain CBN programmes aimed at improving entrepreneurs’ financial inclusion and identified opportunities and challenges. The study concludes that rural entrepreneurs lack access to financial literacy and banking services because banks prefer urban locations for patronage, security, and high stakeholder returns. As a result, rural entrepreneurs are saving profits in their homes or farms, increasing the unbanked and underbanked population. The study recommends rural residents be educated on financial literacy, banking, and cashless transactions to help the CBN’s financial inclusion policy succeed. Due to the harsh terrain of rural regions, the Nigerian government must urgently improve infrastructure (markets, roads, internet access, electricity, etc.) in rural areas. Keywords: Financial access, Financial exclusion, Poverty, Rural entrepreneurship, Strategy and Sustainability