COMPARATIVE ANALYSIS OF DIGITAL LENDING PLATFORMS AND DEPOSIT MONEY BANKS LENDING IN NIGERIA

Nigeria’s Deposit Money Banks (DMBs) and credit market is increasingly characterized by the coexistence of technology-driven digital lending platforms (DLPs). This study examined the two lending channels with emphasis on credit accessibility, cost of lending, loan quality and financial inclusion. A descriptive survey design was adopted, and structured questionnaires were administered to borrowers in Jos North Local Government Area of Plateau State who had obtained credit from DLPs, DMBs, or both. 384 questionnaires administered, 247 usable responses were received, representing 64.32%, Data collected were analyzed using descriptive statistics, Pearson correlation and simple regression in SPSS version 30. The results indicate that lending type significantly explains differences in all four outcomes. DLPs demonstrated superior credit accessibility (B = 0.804, β = 0.749, p < .001) and stronger contribution to financial inclusion (B = 0.921, β = 0.763, p < .001). However, DLPs were associated with higher lending costs (B = 0.769, β = 0.724, p < .001) and with weaker loan quality (B = −0.836, β = −0.737, p < .001), relative to DMBs. The findings suggest a balancing relationship between speed and inclusion on one hand and affordability and credit quality on the other. The study recommends proportionate regulation, transparent pricing, responsible digital credit assessment, interoperable credit information systems and stronger digital capabilities among DMBs. Rather than treating DLPs and DMBs as mutually exclusive alternatives, therefore policymakers should encourage complementary strengths while protecting borrowers from excessive costs, over-indebtedness and abusive recovery practices.