Chapter One — 1.1 Background to the Study

Credit Scoring Models has increasingly attracted the attention of researchers, regulators, and practitioners concerned with financial inclusion of rural dwellers. This growing interest reflects the recognition that credit scoring models does not operate in isolation, but interacts with a wider set of institutional and market conditions found within Selected Microfinance Banks in Nigeria.

Within the context of Selected Microfinance Banks in Nigeria, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of credit scoring models on financial inclusion of rural dwellers, making a context-specific inquiry both timely and necessary.

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 Selected Microfinance Banks in Nigeria 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 Selected Microfinance Banks in Nigeria.
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 Selected Microfinance Banks in Nigeria?
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

Beyond its academic contribution to the field of finance / banking, this study has practical value for management teams within Selected Microfinance Banks in Nigeria seeking to understand how credit scoring models translates into measurable outcomes around financial inclusion of rural dwellers. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

In terms of scope, this BSc study confines itself to Selected Microfinance Banks in Nigeria, 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.