Spatial Analysis of Financial Institutions in Kaduna Metropolis, Kaduna State, using GIS and Nearest Neighbor Analysis

Abstract

This study examines the spatial distribution and locational patterns of financial institutions within Kaduna Metropolis, utilizing Geographic Information Systems (GIS) and Global Positioning System (GPS) technologies to analyze the distribution of commercial banks, development banks, and microfinance banks. A total of 75 commercial banks, 6 development banks, and 24 microfinance banks were identified and mapped within the metropolis. A preliminary field survey employed handheld GPS devices to accurately record the geographic coordinates of these institutions. The Nearest Neighbor Analysis method was used to determine the spatial pattern of their locations, revealing a predominantly clustered distribution with a Nearest Neighbor Index (Rn) of 0.400059 and a Z-score of -15.269540, indicating significant clustering. The analysis showed that commercial banks are mainly concentrated along major roads and commercial centers such as Waff Road, Jos Road, and Ahmadu Bello Way, primarily serving the central business district and high-traffic socio-economic zones. Microfinance banks are dispersed across residential neighborhoods and along major thoroughfares, reflecting their focus on serving small-scale enterprises and low-income households. Development banks, fewer in number, tend to be located along key roads and institutional areas, providing specialized financial services. The findings highlight the strategic placement of financial institutions in accessible, economically active zones that support retail, corporate, and high-order financial activities. However, notable gaps exist in peri-urban and underserved residential areas where financial services are sparse. To address these disparities and improve financial inclusion, the study recommends expanding the physical presence of financial institutions into underserved neighborhoods using GIS-informed site selection.