The Impact of Financial Inclusion on the Nigerian Economy

Abstract

Financial Inclusion is considered an important means to realize the goal of inclusive economic growth. Inclusive financial arrangement is becoming a policy issue in both developed and developing nations of the world as it has been perceived as a veritable tool for poverty alleviation and economic development. This study was set to determine the impact of financial inclusion on economic growth in Nigeria. The nature of data was Secondary sourced from the Statistical Bulletin of the Central Bank of Nigeria (CBN), and the Nigeria bureau of statistics. Data collected covered a period of twenty-eight (28) years (1987-2015). This was analyzed using regression test statistic. Findings revealed that, financial inclusion had a positive impact on poverty reduction in Nigeria, there is causal relationship between financial inclusion and economic growth in Nigeria and that commercial banks intermediation activities have positive effect on financial inclusion in Nigeria. Hence, financial inclusion enhances economic growth in Nigeria. The study therefore recommended that regulators and supervisory bodies, need a consistent and coordinated effort at not only ensuring that the financial institutions offer basic banking products at minimal cost through all their channels to most of the population but also promote consumer enlightenment and protection policy. Efforts should also be made to close the gap/spread between deposit and lending rate in the rural areas to encourage savings.