Impact of financial reforms on digital banking adoption among rural dwellers in South-West Nigeria

Abstract

Type of the article: Research ArticleAbstractDespite several reforms aimed at financial digitalization, such as the Cashless Policy (CP), Bank verification number (BVN), Linkage of National identification number (NIN) to bank accounts, and the Naira Redesign, a large proportion of Nigeria’s rural population remains digitally excluded. This study addresses a pressing gap of whether financial reforms are facilitating sustainable digital banking adoption or compounding existing barriers among rural users in South-west, Nigeria. A cross-sectional survey research design was employed, drawing data from 376 rural dwellers across six South-western states of Nigeria. A structured questionnaire measured rural dwellers’ engagement with digital financial services and the influence of key reforms. Using a cross-sectional survey, responses were analyzed through PLS-SEM, where findings revealed that the Cashless Policy (β = 0.192, p = 0.008) and National Identification Number linkage reform (β = 0.332, p = 0.000) significantly enhanced digital banking adoption, while the Bank Verification Number reform (β = 0.069, p = 0.396) and Naira Redesign (β = 0.038, p = 0.539) showed no significant effects. The study concludes that while some reforms have improved financial inclusion, Bank Verification Number and currency redesign policies require a systematic approach to better address rural realities and therefore recommends infrastructure development and user-focused reforms to strengthen rural digital financial participation.AcknowledgmentThe authors would like to acknowledge all respondents who took part in the survey.