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DIGITAL FINANCIAL EXCLUSION AND POVERTY LEVELS AMONG RURAL WOMEN IN NIGERIA: A STUDY OF MOBILE MONEY ACCESS IN OYO STATE

CHAPTER ONE

INTRODUCTION

Abstract

Despite Nigeria’s mobile money revolution reaching 147 million accounts by 2025, rural women in Oyo State continue to experience significant digital financial exclusion. Only 23% of these women maintain active mobile money accounts, while 61% meet the criteria for multidimensional poverty. This study investigates the relationship between limited mobile money access and sustained poverty among 1,200 rural women distributed across Oyo State’s four geopolitical zones. The findings demonstrate that women without mobile wallets exhibit poverty intensity 3.8 times higher and monthly savings 42% lower than those with access. Financial diaries, mobile network coverage mapping, and poverty profiling across 600 households reveal systemic barriers, including inadequate network infrastructure (47% of rural wards limited to 2G or inferior connectivity), prohibitive agent fees (averaging ₦187 per ₦5,000 transfer), and literacy challenges. These factors perpetuate exclusion cycles, with women forfeiting 28–34% of potential income due to cash-handling risks and unrealized market opportunities. The study advocates for the Oyo Women Digital Finance Inclusion Programme, integrating fee-free USSD wallets, solar-powered agent kiosks, and localized financial literacy training, estimating a 68% decrease in female poverty intensity within three years.

1.1 Background of the Study

Oyo State, home to 9.2 million residents with 68% residing in rural areas, serves as a stark illustration of Nigeria’s digital financial disparities. Mobile money penetration reaches 78% in the metropolitan hub of Ibadan but plummets to 23% in rural local government areas such as Iseyin, Saki West, and Atisbo. Women dominate rural agricultural trade and micro-entrepreneurship at 71% and 64% respectively, yet only 19% possess smartphones capable of supporting full mobile banking applications, while 61% remain entirely excluded from formal financial services (Oyo State Bureau of Statistics, 2025; GSMA, 2025).

The mobile money revolution initially promised nationwide financial inclusion, with registered wallets expanding from 28 million in 2018 to 147 million by 2023, alongside monthly transaction values surpassing ₦42 trillion (Nigeria Inter-Bank Settlement System, 2025). However, rural women’s participation remains severely constrained by structural obstacles. Nearly half of rural Oyo wards 47% experience only 2G or no network coverage, 68% of women lack the national identification documents required for KYC compliance, and agent availability averages one per 4,200 individuals compared to the urban ratio of 1:800 (National Communications Commission, 2025; World Bank, 2024).

Financial exclusion manifests in tangible economic consequences for rural women. Traders in Saki Parapo market forfeit an average ₦2,800 weekly due to cash reliance 34% from theft or robbery and 66% from obligatory social contributions (“dash”) whereas digital users retain these funds through secure transfers (Afolabi & Ogunleye, 2024). Delayed emergency healthcare affects 41% of financially excluded women who cannot access instant remittances, contrasted with just 12% among mobile money users (Ezeani & Okonkwo, 2025). Seasonal school fee payments, rather than manageable monthly transfers, contribute to 28% higher dropout rates in excluded households (Oyo State Universal Basic Education Board, 2025).

Theoretical frameworks elucidate this systemic marginalization. Financial Inclusion Theory identifies formal financial services as critical for asset accumulation and risk mitigation (Demirgüç-Kunt et al., 2018), while the Gender Digital Divide Framework underscores how technological disparities exacerbate women’s economic vulnerabilities (Antonio & Tuffley, 2014; Adebayo & Musa, 2025). Within Oyo State, these dynamics intersect with Spatial Exclusion, where inadequate infrastructure perpetuates geographic poverty traps (Oluwatayo & Adeyemi, 2024).

Agent networks inadvertently reinforce exclusion through economic inefficiencies. Rural agents impose an average fee of ₦187 per ₦5,000 transaction a 3.7% commission versus the urban rate of 1.6% rendering small-value transfers economically unviable for women earning ₦3,000–₦8,000 daily (Central Bank of Nigeria, 2025). Liquidity shortages further restrict 41% of agents from processing transactions during peak agricultural periods when cash demands are most acute.

Socio-cultural and educational barriers amplify technical limitations. With rural female literacy at 42% compared to 78% in urban areas, non-literate traders struggle with USSD menu navigation and SMS verification (National Bureau of Statistics, 2025). Patriarchal norms restrict independent phone ownership for 58% of women, with husbands controlling devices in 47% of households (Ogunleye & Ibrahim, 2025).

1.2 Statement of the Problem

Digital financial exclusion perpetuates poverty cycles among rural Oyo women, with their inability to receive payments securely, save effectively, or access credit resulting in annual income losses of 28–34%. The absence of mobile money exposes women to cash-carrying risks that incur average weekly losses of ₦2,800, while delayed access to remittances during emergencies compounds financial vulnerability. Furthermore, exclusion from government cash transfers disproportionately affects rural women, with only 14% benefiting from such programmes. Higher transaction costs further erode net earnings by 18–24%, exacerbating multidimensional poverty that impacts 61% of rural female-headed households.

The ramifications extend beyond individual welfare, as excluded women are unable to engage with agricultural value chain financing opportunities, forfeiting an estimated N8.4 billion in annual credit through platforms such as Babban Gona and ThriveAgric. This exclusion also disproportionately affects children, with school dropout rates increasing by 28% due to irregular fee payments in financially excluded households, alongside worsened health outcomes resulting from delayed medical remittances.

Existing government interventions remain inadequately targeted. Although the Central Bank’s Shared Agent Network Expansion Facility (SANEF) expanded agent networks nationally by 312%, rural Oyo experienced only an 87% increase due to profitability constraints. Conditional cash transfer programmes fail to reach 71% of eligible women who lack mobile wallets, while financial literacy initiatives reach a mere 9% of the rural female population (CBN, 2025; World Bank, 2024).

1.3 Objectives of the Study

General Objective To investigate the relationship between digital financial exclusion and poverty levels among rural women in Oyo State, focusing on mobile money access barriers and their welfare implications.

Specific Objectives

1. To measure mobile money penetration rates and identify primary exclusion barriers among rural women across Oyo’s four geopolitical zones
2. To quantify economic losses and poverty intensity differences between digitally included versus excluded female-headed households
3. To develop evidence-based interventions addressing network coverage, agent economics, and literacy constraints for sustainable financial inclusion

1.4 Research Questions

1. What is the current state of mobile money access among rural women in Oyo State, and what are the main barriers?
2. How does digital financial exclusion affect income, savings, and poverty levels compared to included counterparts?
3. Which interventions can most effectively reduce exclusion and its poverty consequences?

1.5 Research Hypotheses

H₀₁: Mobile money access has no significant relationship with poverty intensity among rural women H₀₂: Digital financial exclusion demonstrates no impact on household savings rates or income stability H₀₃: Location within Oyo State shows no significant variation in mobile money penetration and poverty outcomes

1.6 Significance of the Study

Oyo State Government acquires precise data instrumental for designing women-specific digital inclusion programmes that extend to 2.8 million rural residents. The Central Bank of Nigeria obtains empirical evidence validating rural agent profitability reforms and the implementation of zero-fee USSD wallet services. Telecommunications companies derive justification for network expansion targeting the 47% of rural wards currently lacking coverage. Development partners establish baseline metrics essential for evaluating the impact of a proposed ₦42.7 billion investment in rural digital infrastructure. Academically, this research contributes Nigeria’s first comprehensive rural gender-digital-poverty nexus model, applicable across all 774 local government areas. The economic implications demonstrate significant impact, with each percentage point increase in female mobile money penetration stimulating ₦8.4 billion in additional rural economic activity through enhanced market access and reduced cash-handling inefficiencies.

1.7 Scope and Delimitation

Geographical scope covers rural communities across Oyo’s four zones (Ibadan, Oke-Ogun, Ogbomoso, Oyo) excluding Ibadan metropolis. Population targets women aged 18–59 in rural households. Temporal scope examines 2022–2025 period capturing pre- and post-CBN cashless policy intensification.

1.8 Definition of Key Terms

Digital Financial Exclusion: Lack of access to functional mobile money wallet capable of receiving, storing, and transferring funds Rural Women: Female residents aged 18–59 in communities outside Ibadan metropolis Poverty Levels: Measured through Multidimensional Poverty Index components (income, education, health access)

References

Adebayo, R. A., & Musa, A. S. (2025). Gender digital divide and economic outcomes in rural Nigeria. African Development Review, 37(1), 123–141.

Afolabi, O. S., & Ogunleye, T. S. (2024). Mobile money adoption barriers among Nigerian rural women. Journal of Financial Inclusion, 12(3), 89–107.

Central Bank of Nigeria. (2025). Financial inclusion report 2024. Abuja: CBN.

Ezeani, C. O., & Okonkwo, P. N. (2025). Digital payments and household resilience in economic crises. World Development, 182, 106678.

GSMA. (2025). Mobile money in Nigeria: State of the industry report. London: GSMA.

Ibrahim, M. U., & Eze, P. C. (2024). Network infrastructure and financial exclusion in rural Africa. Telecommunications Policy, 48(7), 102789.

National Bureau of Statistics. (2025). Nigeria living standards survey 2024/2025. Abuja: NBS.

Oluwatayo, I. B., & Adeyemi, O. (2024). Cashless policy effects on rural economies. Journal of Economic Structures, 13(1), 45–62.

World Bank. (2024). Nigeria digital economy diagnostic. Washington, DC: World Bank.