THE DETERMINANTS OF FINANCIAL INCLUSION AND ITS IMPACT ON ECONOMIC GROWTH IN NIGERIA
Joseph A. Omojolaibi1, Lawrence O. Ogbeifun2
1Department of Economics, University of Lagos, Akoka, Lagos, Nigeria
2Department of Economics, University of Lagos, Akoka, Lagos, Nigeria.
Financial inclusion has received renewed attention of researchers as well as of policy makers of both developed and developing economies, this is due to its potency in encouraging economic growth. In a broad sense, financial inclusion is a process that marks improvement in quality, quantity, and efficiency of financial intermediary services to each and every member of an economy. The pre-occupation of this paper therefore, is to highlight the determinants of financial inclusion and its impact on economic growth in Nigeria. The study leans on the Ordinary Least Square (OLS) techniques to analyse the data. The analysis reveals that Number of banks branches (NBB) were found to have significant effect on the level of financial inclusion, while GDP per worker, income inequality, Interest rate (IR), Polity Score (POL), and Total natural resources rent (TNRR) had no significant impact on financial inclusion. The impact of these determinants on financial inclusion has significant effect on GDP per worker, which invariably determines the final level of output in the economy. The policy implication that emanates from this study highlights the need for adequate financial and political security to be put in place. This will ensure a financially and politically secure system of governance that will boost the confidence of existing and new customers in opening of formal account and increasing savings deposit mobilization within the financial system.
Key Words: Financial Inclusion, Economic Growth, Nigeria
JEL Classification: C59, G17, G32