IMPACT OF AGENCY BANKING EXPOSURE ON FINANCIAL INCLUSION AND YOUTH ECONOMIC EMPOWERMENT IN BAUCHI STATE, NIGERIA.

Abstract

Although agency banking outlets are rapidly growing across the country, there have been questions about whether its proliferation will lead to meaningful financial engagement and whether it will have a positive impact on economic outcomes, especially among youth. The study investigates the effect of the expansion of agency banking on financial inclusion and youth economic empowerment in Bauchi State, Nigeria. The study was inspired by Financial Intermediation Theory and Diffusion of Innovation Theory, with a cross-sectional survey design that involved 369 samples aged 18-35 years and in five sampled Local Government Areas in Bauchi State. Descriptive statistics and multiple regression analysis were employed, and the results indicate that awareness, accessibility, and use of agency banking services are relatively high among the youth population in the study area. The empirical results also showed that agency banking exposure positively affects financial inclusion (R² = 0.512, β = 0.715, p < 0.05) and economic empowerment of the youth (R² = 0.452, β = 0.673, p < 0.05). The study found agency banking to be an effective tool for bridging the financial access gap and to serve as a means for economic empowerment of the youth, but other socio-economic factors dampen this relationship. It suggests specific policy measures to ensure that the developmental advantages of agency banking are maximised, such as extending the reach of agents through the scaling up of agent networks, financial education programmes and financial products targeting the youth population.