Analysis of Alternative Banking Methods among Rural Farming Households in Delta State, Nigeria

Abstract

The study focused on the alternative banking methods among rural farming households in Delta State, Nigeria. The study also examined the rural farming households’ constraints to their choice of banking methods in the State. Samples for the study were obtained using multistage sampling techniques (procedure) in random selection of local government, communities and rural farming households. Firstly, three local government areas each were selected from each of the three agricultural zones in the state making up to nine (9) local government areas from the twenty-five (25) local government areas. Secondly, two communities from each of the local government areas were selected, making it up to 18 communities. Finally, twenty rural households were randomly selected from each of the sampled communities making it up to three hundred and sixty rural households. Only three hundred and twenty (320) respondents were utilized for this research study. The study reveals that primary education with household size of 10 persons dominated the rural farming households in the State. The mean age of respondents in the state is 46 years engaging in farming activities and dominated by female headed households. Most rural farming households were married engaging mostly in arable crop production and livestock production. Most rural farming households are engaged in mobile banking called Osusu and commercial banking, while Agricultural banking was lacking in the area. Most respondents strongly agreed that the processes of loan acquisition in convectional banks are discouraging and convectional banks loan attract more percentages compare to mobile banking. The choice of mobile banking may have been due to easy accessibility to loan acquisition for their farming activities. The study therefore recommends that unorganized banking should be encouraged by Government agencies in terms of policies for smooth operations. The study also recommends that convectional banks should be closer to the rural farming households with easy access to their loan facilities for farming operations.

Keywords: Banking Method, Rural Household, Delta State, Nigeria