A. E Omankhanlen

EFFECT OF BANK UNDERCAPITALIZATION AND LOANDELINQUENCY ON FINANCIAL INCLUSION IN NIGERIA

Financial Inclusion involves ensuring that the poor have access to financial services that are relevant to their needs especially in the rural communities. This study investigated the extent to which undercapitalization of rural banks and frequent loan delinquency influence the ability of deposit money banks to drive the inclusive growth agenda of the Central Bank of Nigeria. Out of the 250 questionnaires distributed, 179 were returned and analyzed. Being a categorical data, the study employed optimal scaling regression to measure the relationship between the dependent and independent variables. ANOVA and other statistical tests were also conducted. The study found that loan delinquency, undercapitalization and payment of utility bills were significant in measuring the inclusive growth initiative of the Central Bank of Nigeria. It therefore recommends among others that the central bank should make policies that will increase the credit worthiness of the rural dwellers as well as encourage banks to boost the capital base of the rural banks in order to be equipped with the financial muscle to drive financial inclusion in Nigeria