Effectiveness of Non-Conventional Banking Systems in Delivery of Financial Services to Small-Scale Agribusiness Operators in Delta State, Nigeria
Keywords:
effectiveness, non-conventional, banking systems, financial services, small-scale, agribusiness operators,Abstract
This study evaluated the effectiveness of non-conventional banking systems in providing financial services to small-scale agribusiness operators in Delta State, Nigeria. The specific objectives were to ascertain the volume of savings mobilized, assess credit access, examine default rates, evaluate deposit security, estimate the effectiveness index (EI), and identify factors influencing effectiveness. A multi-stage sampling technique was employed to select 60 respondents comprising crop farmers and agricultural traders. Data were collected through structured questionnaires and analyzed using descriptive statistics, Effectiveness Index formula, and multiple regression analysis. Findings revealed that 83.4% of respondents actively saved with informal financial institutions, with monthly savings ranging from less than ₦5,000 to above ₦20,000. About 70% had accessed credit, with average loans between ₦20,000 and ₦100,000. The default rate stood at 42.9%, mainly due to business loss and emergencies. A majority (68.3%) believed their deposits were secure, and only 11.7% reported loss of funds. The overall Effectiveness Index of the non-conventional systems was computed at 73.57%, indicating a moderately high level of service effectiveness. Regression results showed that saving effectiveness (p=0.000), lending effectiveness (p=0.000), deposit security (p=0.000), and withdrawal ease (p=0.008) significantly influenced system effectiveness. The study concludes that non-conventional banking systems are effective in delivering financial services to small-scale agribusiness operators and recommends strengthening their operations through policy support, training, digital integration, and improved loan management practices.
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