Financial Inclusion and Growth of Small and Medium Sized Enterprises: Evidence from Nigeria

Abstract

Financial inclusion involves decreasing the number of unbanked population through series of activities that will enhance the participation in the financial system. The objective of this study is examining financial inclusion and its implications on growth of small and medium sized enterprises (SMEs) in Nigeria from 1992 to 2020 using data obtained from the Central Bank of Nigeria (CBN) Statistical Bulletin. The study used the classical linear regression model using Ordinary least square (OLS) and Dynamic Ordinary Least Square (DOLS) to analyse the data. The outcome of the analysis revealed that the growth of small and medium sized enterprises (SMEs) in Nigeria is positively and significantly influenced by financial inclusion. The findings further revealed that government needs to steer up efforts in ensuring the dissemination of all banking services to reach everyone at affordability fees regardless of income group and location.