BANKING PROXIMITY AND ENTREPRENEURIAL SURVIVAL IN RURALAREAS: NAVIGATING THE ECONOMIC SHOCK OF FUEL SUBSIDYREMOVAL IN NIGERIA

Abstract

This study examined the effect of banking proximity on rural entrepreneurs’ access to financial buffer services in the context of the economic shock resulting from fuel subsidy removal in Nigeria. Guided by a descriptive survey design, the research was conducted in Akwa Ibom State and focused on grocery store owners and selected farmers whose businesses were significantly affected by rising operational costs. A sample of 121 respondents was drawn using simple random sampling techniques, and data were collected through a structured instrument titled “Banking Proximity and Entrepreneurial Survival in Rural Areas Questionnaire”. Findings revealed a significant relationship between banking proximity and rural entrepreneurs’ access to financial buffer services, indicating that entrepreneurs situated closer to banking facilities were better equipped to obtain emergency credit, savings support, and liquidity-enhancing products necessary for business stability during economic disruptions. The study concluded that rural entrepreneurs with greater banking proximity exhibit stronger resilience, maintain better liquidity control, and demonstrate higher survival and recovery rates following subsidy-related shocks compared to those operating farther away from financial institutions. It was recommended that commercial banks, microfinance institutions, and cooperative banks expand their outreach through mini-branches, service kiosks, and mobile banking units in rural areas to reduce travel costs and delays in accessing financial services. Additionally, the government should prioritize road rehabilitation in rural communities to improve accessibility to banking services and lessen the physical and financial burden associated with reaching distant banks.