Extending the Theory of Planned Behavior in financial inclusion participation model – evidence from an emerging economy

Recently, researchers have deployed the Theory of Planned Behavior (TPB) to examine factors influencing financial inclusion participation behaviour. However, more must be made to expand the theory by integrating sectoral and contextual variables. Hence, this study extends TPB by intergrating additional financial inclusion participation behavior determinants in Nigeria, an emerging economy. The study employed a quantitative research methodology with a positivist research design. The target population included 23 million adults aged 15 years and above in Northwest Nigeria. From this population, a sample of 500 adults was selected using a stratified simple random sampling technique. Data from the sample was collected through survey questionnaires and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings revealed that all the original TPB variables, attitude, subjective norms, perceived behavioural control, and behavioural Intention, strongly influenced financial inclusion participation. It was also found that of the three new variables included, awareness and government support significantly influenced financial inclusion participation behaviour. In contrast, access to banking and digital channels was found to be insignificant. These findings imply that for better financial inclusion and participation, the government should play a proactive role in ensuring essential awareness about new banking products and services, especially those that align with the dominant religious beliefs of the Northwestern region, such as Shariah-compliant banking products and services. Additionally, policy support should be extended to enhance access to banking and digital channels for Nigeria’s underserved communities.This research paper enhances the Theory of Planned Behaviour (TPB) in the realm of financial inclusion by introducing new variables, including Awareness, Government support, and Access to banking and digital channels. The findings propose actionable steps for both Governments and Financial Services Providers. Specifically, in Northwest Nigeria, where literacy rates are low, it emphasizes the importance for the government to raise awareness of financial products, advocating for policies that promote knowledge and visual promotions in rural areas. Recommending a review of the National Financial Inclusion Strategy (NFIS) for 2019-2024 is essential for optimizing efforts to achieve the revised 95% financial inclusion target in Nigeria by 2026. Despite urban banking penetration growth, limited access to digital channels in rural areas impedes financial inclusion progress. The study suggests that financial institutions leverage insights to expand Islamic banking offerings, either by incorporating Islamic banking windows in conventional banks or establishing new Islamic banks to cater to Sharia-compliant financial service demand. Positive attitudes and perceived behavior control in the northwest region present opportunities for introducing Islamic financial products (IFPs) and garnering support for formal financial systems.