Deposit Mobilization Strategies in Developing Economies: Trends, Challenges, and a Proposed Multi-Layered Banking Growth Model

• Author(s): Priscilla Samuel Nwachukwu ; Onyeka Kelvin Chima ; Chinelo Harriet Okolo
• Paper ID: 1710335
• Page: 300-322
• Published Date: 31-07-2020
• Published In: Iconic Research And Engineering Journals
• Publisher: IRE Journals
• e-ISSN: 2456-8880
• Volume/Issue: Volume 4 Issue 1 July-2020

Abstract

Deposit mobilization remains a cornerstone for banking sector growth, financial inclusion, and economic development in developing economies. As banks strive to deepen their intermediation role, attracting, retaining, and efficiently utilizing deposits has become increasingly critical. This paper explores evolving trends, identifies key challenges, and introduces a proposed multi-layered banking growth model designed to strengthen deposit mobilization in resource-constrained environments. Recent trends reveal a dual pathway: digital financial technologies and traditional relationship-driven banking practices. While mobile money platforms, agency banking, and fintech collaborations have expanded deposit access and outreach, rural-urban divides, digital illiteracy, and infrastructure deficits continue to hinder optimal penetration. Furthermore, competition from non-bank financial institutions and informal savings mechanisms poses additional obstacles, limiting formal sector mobilization. The challenges extend beyond access to issues of trust, regulatory rigidity, high transaction costs, and macroeconomic volatility, which collectively undermine depositors’ confidence and banks’ ability to mobilize stable funds. In addition, socio-cultural barriers and inadequate financial literacy exacerbate deposit stagnation. Addressing these limitations requires an integrated approach that aligns institutional capacity, technological innovation, and policy reforms. To this end, the paper proposes a Multi-Layered Banking Growth Model that synergizes three critical pillars: (i) Institutional Layer, emphasizing robust regulatory frameworks, transparent governance, and customer-centric policies; (ii) Technological Layer, leveraging digital tools, blockchain-based recordkeeping, and artificial intelligence for tailored deposit products and enhanced financial security; and (iii) Community Layer, focusing on grassroots financial literacy, trust-building, and cooperative linkages that embed banks within local socio-economic systems. The model underscores adaptability, scalability, and resilience as essential features for sustainable deposit mobilization in diverse contexts.By integrating these layers, developing economies can overcome systemic challenges, foster inclusive participation, and strengthen the role of banking institutions in capital accumulation and economic growth. The study concludes that deposit mobilization strategies must be multidimensional, combining innovation, regulation, and community engagement to secure long-term financial stability and development.

Keywords

Deposit Mobilization, Developing Economies, Financial Inclusion, Banking Growth Model, Fintech, Financial Literacy, Economic Development, Multi-Layered Strategy

Citations

IRE Journals:
Priscilla Samuel Nwachukwu , Onyeka Kelvin Chima , Chinelo Harriet Okolo "Deposit Mobilization Strategies in Developing Economies: Trends, Challenges, and a Proposed Multi-Layered Banking Growth Model" Iconic Research And Engineering Journals Volume 4 Issue 1 2020 Page 300-322

IEEE:
Priscilla Samuel Nwachukwu , Onyeka Kelvin Chima , Chinelo Harriet Okolo "Deposit Mobilization Strategies in Developing Economies: Trends, Challenges, and a Proposed Multi-Layered Banking Growth Model" Iconic Research And Engineering Journals, 4(1)