Financial Exclusion, Financial Institutions and Corporate Social Responsibility: A Developing Country Perspective

Abstract

Financial exclusion is a financial phenomenon as much as it is a social phenomenon. Given the differences in socio-economic conditions across nations, it is likely that financial exclusion is driven by different factors in different countries. This paper argues that illiteracy is one of the major drivers of financial exclusion in developing countries and presents a case study of Nigeria. Accordingly, banks operating in Nigeria should worry about financial exclusion, as it primarily shrinks and limits their access to a wider market. Notwithstanding, the paper further argues that banks in Nigeria could leverage on the seeming obstacles constituted by the prevalence of illiteracy-driven financial exclusion to enhance their brands by tackling financial exclusion in the form of corporate social responsibility; and in so doing, mitigate the probable risk of 'harsh' social regulations on the part of policy makers to address the existence of financial exclusion in Nigeria.

Keywords: Financial exclusion, Nigerian Banks, Corporate Social Responsibility

JEL Classification: E59, G20, I30, N27, O17