Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between credit scoring models and financial inclusion of rural dwellers has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of the Nigerian Oil and Gas Sector where operating conditions differ markedly from more developed markets.

the Nigerian Oil and Gas Sector presents a useful setting for examining this relationship precisely because the conditions there — structural, regulatory, and behavioural — differ from those typically assumed in the broader literature, most of which draws on evidence from more developed economies.

1.2 Statement of the Problem

While credit scoring models is widely discussed in policy and industry circles, empirical evidence on its actual effect on financial inclusion of rural dwellers within the Nigerian Oil and Gas Sector remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to credit scoring models are helping or hindering financial inclusion of rural dwellers — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Credit Scoring Models on financial inclusion of rural dwellers in the Nigerian Oil and Gas Sector.
2. To assess the extent to which credit scoring models influences financial inclusion of rural dwellers within the study area.
3. To identify the challenges associated with credit scoring models in relation to financial inclusion of rural dwellers.
4. To recommend strategies for optimizing credit scoring models in order to improve financial inclusion of rural dwellers.

1.4 Research Questions

1. What is the effect of credit scoring models on financial inclusion of rural dwellers in the Nigerian Oil and Gas Sector?
2. To what extent does credit scoring models influence financial inclusion of rural dwellers within the study area?
3. What challenges are associated with credit scoring models in relation to financial inclusion of rural dwellers?
4. What strategies can be adopted to optimize credit scoring models in order to improve financial inclusion of rural dwellers?

1.5 Significance of the Study

This study is significant to a range of stakeholders. For policymakers and regulators, the findings offer evidence to guide the design of frameworks that support healthier outcomes around financial inclusion of rural dwellers. For managers and practitioners within the Nigerian Oil and Gas Sector, the study provides practical insight into how credit scoring models can be better managed. Finally, it contributes to the academic literature on finance / banking by extending existing knowledge into a specific empirical context, and offers a reference point for future researchers.

1.6 Scope of the Study

In terms of scope, this BSc study confines itself to the Nigerian Oil and Gas Sector, focusing specifically on how credit scoring models relates to financial inclusion of rural dwellers within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.