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On the determinants, gains and challenges of electronic banking adoption in Nigeria

Joseph Junior Aduba (Graduate School of Economics, Ritsumeikan University, Kusatsu, Japan)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 25 March 2021

Issue publication date: 22 June 2021




The purpose of this study is to examine the gains, challenges and determinants of electronic banking adoption in Nigeria.


This paper applied the generalized structural equation modelling (GSEM) to a large sample of respondents surveyed from five of the six geopolitical zones of Nigeria to model the determinants of electronic banking. In addition to many other advantages, GSEM can be used as a likelihood function. As a result, this paper proposes GSEM as the most appropriate tool for modelling the socioeconomic determinant of electronic banking adoption.


About three-quarter of respondents adopted at least a form of electronic banking. However, only a tenth of users used e-banking for purchase of goods or services, implying low electronic payment adoption. The low adoption of electronic payment was due to poor digital security infrastructure which made users vulnerable to widespread electronic frauds. The findings also show that the adoption of e-banking platforms or services was characterized by users' socioeconomic status. For example, the odds of adopting internet/mobile banking decreases with older users but increase with higher educational attainment and income, whereas the odds of adopting e-banking platforms such as short message service (SMS) and point of sale (POS) banking increases with older users and informally employed users respectively.

Practical implications

For a sustainable cashless economy and financial inclusion in Nigeria, policy consolidation that provides safe e-banking services is necessary. Also, e-banking service providers should deliver specific contents and services that match the physical and economic characteristics of users.


Generalized structural equation modelling (GSEM) is a robust likelihood function method that combines the power of structural equation modelling with the generalized linear model. The application of GSEM to predict the likelihood of adopting a banking technology or Service has not been explored in electronic banking literature. Also, as a fast-growing economy with a heterogeneous population, Nigeria presents an interesting context to study the determinants of electronic banking.



Funding: This research was supported by the Japan Society for the Promotion of Science, Grant No. 19J10715. The authors acknowledge the contributions of enumerators used for the survey work.


Aduba, J.J. (2021), "On the determinants, gains and challenges of electronic banking adoption in Nigeria", International Journal of Social Economics, Vol. 48 No. 7, pp. 1021-1043.



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