Rural households are characterized with various systems of banking methods. This
involves process of savings their money, sourcing for funds and lending money to boost their
productivity as well as improving their standard of living and general well being. In this vein, the
study assessed the banking behaviour of rural households in southwestern Nigeria. The
methodology adopted involved the use of well structured questionnaire for collection of
information on factors that influence banking behaviour among rural households in southwestern
Nigeria. A total of 300 questionnaires were administered.
Descriptive statistics such as percentage and frequency distribution were used to analyze
the data on socio-economic characteristics of the rural households. Probit regression analysis was
used to analyze their relationship between the choice of mobile bankers (Ajo) and socioeconomic
characteristics of the respondents. The result shows that there is negative correlation
between the sex of the respondents, age, years of formal education, household’s size, livestock
production and savings in convectional banks while marital status, cash crop production, arable
crop production, artisan and traditional leadership had a positive correlation. Sex, age and saving
in convection bank are significant at 1 percent, marital status and years of formal education are
significant at 5 percent while Traditional leadership is significant at 10 percent. The study
recommended that unorganized rural banking methods should be strengthened through
government intervention so as to guide their activities. Also Microfinance banks should extend
their operational unit to the rural areas so as to bridge the gap between the formal and informal
rural financial institutions. There should be awareness on the relevance of conventional banks to
rural development and convectional banks should extend their operation unit to rural households
by making use of the unorganized rural banking systems.