AN EVALUATION OF THE ROLE OF DIGITAL BANKING IN ENHANCING FINANCIAL INCLUSION AMONG RURAL POPULATIONS IN CAMEROON

CHAPTER ONE INTRODUCTION 1.1 Background of the Study In the evolving landscape of the financial sector, digital banking has emerged as a pivotal mechanism for advancing financial inclusion, reshaping how individuals access and utilize financial services. The growth of internet-enabled banking has significantly transformed the accessibility, efficiency, and convenience of financial services, extending them to a broader spectrum of the population. Importantly, digital banking offers not only improved service delivery but also serves as a strategic tool for integrating marginalized and financially excluded populations into the formal financial system (Cnaan et al., 2023). Digital banking—including mobile banking, internet banking, and other electronic financial platforms—presents a sustainable and scalable solution to close the financial inclusion gap. According to Thathsarani and Jianguo (2022), financial inclusion encompasses the ease with which both individuals and businesses access a variety of financial services. Mobile money and digital banking services have gained significant traction across several African countries, including Cameroon. These platforms enable users to carry out financial transactions via mobile phones, thereby reducing reliance on physical banking infrastructure (Williams, 2017). The widespread penetration of mobile phones in Cameroon has been instrumental in creating an enabling environment for the adoption of digital banking solutions. Popular mobile money services such as MTN Mobile Money and Orange Money have established a strong presence, offering services that include money transfers, bill payments, and savings (Bongomin et al., 2016). The relevance of digital banking goes far beyond transaction convenience; it carries substantial economic and societal implications. It contributes positively to economic development by streamlining financial transactions, encouraging savings, and expanding access to credit. These services are fundamental to effective personal financial management and can significantly enhance the economic well-being of individuals and communities alike. Nevertheless, rural areas face a unique set of challenges. Financial and digital illiteracy, coupled with poor transport infrastructure and concerns about fraud, often discourage residents from engaging with formal financial institutions (Bradley & Patrick, 2017). Instead of depositing savings in banks, many rural dwellers prefer to keep money at home or utilize informal saving mechanisms like cooperative societies. Another key barrier to digital banking adoption in rural communities is the low rate of smartphone ownership, largely attributed to the high cost of mobile devices in Cameroon (Adepetun, 2021). In addition, concerns over the rising threat of cybercrime—such as debit card fraud, account hacking, identity theft, and impersonation of banking personnel—have further discouraged rural residents from embracing digital financial services. Despite reassurances from banks regarding the safety and security of digital banking platforms, these risks continue to generate fear and mistrust among rural users. Banks operating in Cameroon face notable challenges in extending banking services to the population, particularly within rural areas, which comprise a large segment of the unbanked populace. Furthermore, as digital transformation progresses, it is imperative to address the widening digital divide. Disparities in access to technology may reinforce existing social and economic inequalities, further marginalizing vulnerable groups. However, despite these challenges, the potential of digital banking to foster financial inclusion and economically empower underserved populations remains undeniable. Given this context, the present study proposes to investigate the influence of digital banking on promoting financial inclusion among rural residents in Cameroon, in order to better understand its role in bridging the financial access gap. 1.2 Statement of the Problem Cameroon, with an estimated population exceeding 26 million, comprises a substantial rural demographic that represents approximately 44% of the total population (World Bank, 2022). In recent times, digital banking has emerged as a transformative force in enhancing financial inclusion, particularly for underserved groups in rural communities. Nevertheless, numerous barriers continue to impede rural dwellers from fully accessing and benefiting from financial services. These challenges include geographic remoteness, insufficient financial literacy, and a lack of supporting infrastructure. Traditional banking institutions tend to concentrate their services in urban areas, thereby limiting rural populations’ access to essential financial products and services. Financial inclusion—which involves providing all individuals and businesses, regardless of socio-economic status, with access to affordable and appropriate financial services—is a critical component of broader economic development and poverty reduction strategies. Despite this importance, many rural communities remain excluded from mainstream financial systems. Moreover, a study by Kantar (2018) highlights a crucial gap in national digital strategies, pointing out that the concept of digital inclusion has often been overlooked in government-led digital initiatives and policy frameworks. Consequently, it remains unclear to what extent digital financial technologies (fintech) and related services effectively promote financial inclusion within rural contexts. In light of these gaps, this study seeks to explore and assess the influence of digital banking on enhancing financial inclusion among rural dwellers in Cameroon, thereby contributing to the body of knowledge and informing future policy directions aimed at inclusive digital financial development.  1.3  Objectives of the Study The main purpose of this study is An Evaluation of the Role of Digital Banking in Enhancing Financial Inclusion Among Rural Populations in Cameroon. Specifically, the study will; i.Determine the current level of digital banking adoption among rural dwellers in Cameroon. ii.Investigate the factors preventing rural dwellers from adopting digital banking services. iii.Evaluate strategies to enhance the adoption of digital banking among rural dwellers in Cameroon. 1.4  Research Questions The following questions have been prepared for the study: i.What is the current level of digital banking adoption among rural dwellers in Cameroon? ii.What are the factors  preventing rural dwellers from adopting digital banking services? iii.What strategies can enhance the adoption of digital banking among rural dwellers in Cameroon? 1.5 Research Hypotheses H0: Digital banking has no significant influence in promoting financial inclusion among rural dwellers in Cameroon. Ha: Digital banking has a significant influence in promoting financial inclusion among rural dwellers in Cameroon. 1.6 Significance of the Study Rural dwellers stand to benefit the most from improved financial inclusion through digital banking. Enhanced access to banking services will help them save money, access credit, and manage their finances more effectively.Additionally, the government will use the research findings to formulate policies that encourage the adoption of digital banking and support financial inclusion initiatives. Moreover, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the influence of digital banking in promoting financial inclusion among rural dwellers in Cameroon. 1.7 Scope of the study    The scope of this study is boarded on An Evaluation of the Role of Digital Banking in Enhancing Financial Inclusion Among Rural Populations in Cameroon. Empirically, this study will to determine the current level of digital banking adoption among rural dwellers,investigate the factors preventing rural dwellers from adopting digital banking services and evaluate strategies to enhance the adoption of digital banking among rural dwellers. Geographically, the study will be delimited to residents of Eastern regions of Cameroon. 1.8 Limitation of the study In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.  1.9 Definition of Terms Digital banking: refers to the use of electronic platforms and technologies to provide banking services. Financial inclusion: is the process of ensuring access to affordable, timely, and adequate financial services for all individuals, particularly those who are underserved or unserved by traditional banking systems. Rural dwellers: individuals living in areas outside of urban centers in Cameroon.