DETERMINANTS OF FINANCIAL INCLUSION (FI) IN NIGERIAN ECONOMY

Abstract

In this study, which covered the 16-year period from 2006 to 2021, the factors of financial inclusion (FI) in the Nigerian economy were empirically explored. As suggested in the model, after controlling for deposit interest rate and inflation rate, GDP per capita income, domestic credit to the private sector (% of GDP), broad money supply (% of GDP), number of commercial banks network, and age dependency ratio were all suggested as the determinants of FI. Data for the study were taken from the Central Bank of Nigeria Statistical Bulletin (2021), World Bank Data (2021), and International Monetary Fund report (2020), and were estimated using the ordinary least square approach with the aid of Econometric Views version 9.0. The study found that GDPPC, PSC/GDP NBRA, ADEPR and INFR all have a positive statistically insignificant effect on FI. This stance implies that FI in Nigeria is marginal. However, the number of commercial banks network and the age dependence ratio have a negative statistically negligible impact on FI whereas the M2/GDP and DEIR have a positive statistically significant impact. Therefore, the analysis draws the conclusion that the only significant factors of FI in Nigeria are M2/GDP and DEIR. In light of this, we advise all deposit money banks to make sure their goods and services are alluring since doing so will encourage the Nigerian people to save more.
 Keywords: FI, Deposit, Interest Rate, Inflation Rate and Credit to Private Sector.