An Evaluation of the Role of Retail Banking in Poverty Reduction: A Study of Sterling Bank, Katsina State
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Background of the Study
Retail banking plays a crucial role in alleviating poverty by offering accessible financial services that empower individuals and small enterprises. Sterling Bank in Katsina State has undertaken initiatives to extend banking services to underserved communities, contributing to poverty reduction efforts. By providing microfinance, affordable savings products, and tailored loan facilities, the bank helps low-income earners improve their economic conditions and gain financial independence (Muhammad, 2023).
Through community outreach programs and financial literacy initiatives, Sterling Bank has enhanced the financial capabilities of its clients, enabling them to manage resources more effectively and invest in income-generating activities. The bank’s approach involves leveraging both traditional branch networks and digital platforms to ensure widespread access to essential financial services. These strategies have been instrumental in creating opportunities for entrepreneurship, job creation, and overall economic empowerment in impoverished regions (Aminu, 2024).
However, the impact of retail banking on poverty reduction is influenced by several factors, including the level of financial literacy, the availability of tailored products, and the extent of outreach initiatives. This study critically examines how Sterling Bank’s retail banking services contribute to poverty reduction in Katsina State, evaluating the effectiveness of current interventions and identifying gaps that hinder further progress. The findings will provide actionable insights into enhancing the bank’s role in driving inclusive economic growth and sustainable poverty alleviation (Suleiman, 2025).
Statement of the Problem
Despite Sterling Bank’s proactive initiatives to reduce poverty, many low-income individuals remain financially excluded due to systemic barriers. Challenges such as stringent collateral requirements, limited financial education, and inadequate outreach in remote areas impede the bank’s ability to extend its services effectively (Muhammad, 2023).
Many community members face difficulties in accessing credit and savings products that are designed to support their economic activities. Moreover, cultural and social factors may inhibit the adoption of formal banking services, leaving a significant portion of the population reliant on informal financial mechanisms. These issues contribute to persistent poverty and hinder efforts to achieve financial inclusion. The study seeks to explore these obstacles and determine the extent to which Sterling Bank’s retail banking services are effective in reducing poverty. By identifying critical barriers, the research aims to propose strategies that can better align the bank’s interventions with the needs of the impoverished communities in Katsina State (Aminu, 2024).
Objectives of the Study
- To assess the impact of Sterling Bank’s retail banking services on poverty reduction.
- To identify barriers that limit financial inclusion among low-income populations.
- To propose strategies for enhancing the effectiveness of poverty alleviation initiatives.
Research Questions
- How do Sterling Bank’s services contribute to poverty reduction in Katsina State?
- What are the main barriers to financial inclusion for low-income individuals?
- What strategies can improve the role of retail banking in alleviating poverty?
Research Hypotheses
- H₁: Retail banking services have a significant positive impact on poverty reduction.
- H₂: Higher levels of financial literacy correlate with better poverty alleviation outcomes.
- H₃: Tailored banking products improve financial inclusion among low-income populations.
Scope and Limitations of the Study
This study focuses on the poverty reduction initiatives of Sterling Bank in Katsina State. Limitations include potential sampling biases, cultural factors affecting financial behavior, and external economic influences.
Definitions of Terms
- Poverty Reduction: Efforts to decrease the number of people living below the poverty line.
- Financial Inclusion: Ensuring access to useful and affordable financial services.
- Microfinance: Small-scale financial services targeted at low-income individuals.
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