Journal of Biology, Agriculture and Healthcare www.iiste.org ISSN 2224-3208 (Paper) ISSN 2225-093X (Online) Vol.11, No.12, 2021 15 Financial Inclusion: Exploring the Potentials of Daily Savings Enterprises (DSEs) in Savings Mobilization and Credit Delivery in Cross River State, Nigeria Innocent Asuquo Asuquo* Eno Donatus Uwah Department of Agricultural Economics, University of Calabar, Calabar – Nigeria Abstract The study examined the potentials of Daily Savings Enterprises (DSEs) in savings mobilization and credit delivery as a veritable tool in financial inclusion of low income groups in Cross River State. A total of 60 DSEs and 99 member-savers were randomly selected for the study. Data was analyzed using multiple regression. Data analysis from the savings function showed that the number of member-savers per DSE and income of the participants were significant, while the credit delivery function revealed that number of member-savers, volume of savings in a year, interest charged and volume of credit already extended were significant, and key variables in credit delivery. Arising from this, therefore, the study recommends the inclusion of DSEs in the National Financial Inclusion Strategic Plan for a robust mobilization of the low income groups in Nigeria. Keywords: DSEs, Savings, Credit delivery, National Financial Inclusion. DOI: 10.7176/JBAH/11-12-03 Publication date:June 30 th 2021 1. Introduction In many developed and developing economies, finance is a critical element for industrial development. Studies by Berger and Udell (2004) and Isong (2010) showed the consequences of limited access to financial resources on a country’s growth and development. While finance obviously may not be the only problem militating against the development of firms, it is certainly the most formidable (Ijere 1986). Firms depend on a variety of financial resources, both internal and external, to finance production. However, internal and external funds in whatever form are built from savings, and theories of Investments (Profit theory, the accelerator theory and financial theory), further emphasize the importance of savings in terms of capital stock and undistributed earnings. Invariably, savings is very key in investment decisions and productivity of any nation. It is consequent upon this that government at different levels and at various times in Nigeria have emphasized savings and have implemented different savings and credit schemes which are always targeted at addressing financial constraints. Ironically, in spite of government’s efforts, many business owners and potential borrowers still have difficulties accessing funds particularly from formal financial institutions. Graham (1992) and Yaron (1992) observed that, many of these schemes failed because government efforts and energies were devoted to mostly supply-led financial development strategies. In other words, the financial institutions through which credit was channeled to borrowers were faulty in design; and were not true financial intermediaries and as a result; were incapable of mobilizing deposits. Arising from this, therefore, these institutions were constraint and inefficient and ended up with loans that were not serviced. The problem of mobilizing savings was not just specific to government credit schemes, conventional banks that were not part of the schemes equally had issues mobilizing deposits and extending credit; and according to Adeyemo and Bamire (2005) many low income Nigerians were affected by this problem, particularly with regards to credit, and these Nigerians constitute more than 80% of the overall population. It has been observed by Iganiga and Asemota (2008) that the exclusion of this group and this majority is the reason for the slow industrial growth in the country. The formation of many groups with the sole aim of tackling many economic challenges arose from this exclusion. Many had to create alternatives to building financial resources and most importantly at solving their credit needs. The proliferation of Daily Saving Enterprises (DSEs) in many parts of the country, though in existence before now, became even a powerful tool to many low income persons. The DSEs somehow filled the void created by formal institutions as farmers, market men and women, other businesses, and public servants, had their versions and were active participants in savings mobilization and credit extension. The situation today is not significantly different. DSEs still exist in many rural and urban centers and have been termed by many as “the modern unorganized mobile banking scheme”, with a banker (money collector) and his clients (savers). The dynamic role of DSEs has been acknowledged and recognized with many noting that if properly harnessed, has huge potentials for sustainable economic development. Iganiga and Asemota (2008) for instance, see DSEs as engines through which growth and economic development can be achieved. The Launch of the National Financial Inclusion Strategy (NFIS) in 2012 was to reduce the adult financial exclusion rate from 46.3% in 2010 to 20% by 2020 (Akin-Fedeyi and Prochazka 2016). The six facets of the strategy were savings, affordable credit, insurance, payment and remittances, financial advice and bank accounts.