The Impact of Financial Development on Poverty in Nigeria

Abstract

This study was aimed to examine the impact of financial development on poverty in Nigeria using annual time series data- spanning 30 years (1990-2O20). Variables used in the model were; per capita income, money supply, domestic credit to private sector and interest rate. The data for this study was obtained mainly from secondary source, which was collected from CBN statistical bulletin. The Ordinary Least Square (OLS) regression technique was employed using econometric views (E-views) version 10.0 software. The results indicated that that there is a significant positive relationship between financial development and poverty in Nigeria, which is consistent with the a prior expectation. Also, the result showed that money supply has a positive and significant effect on poverty in Nigeria. Furthermore, the study revealed that domestic credit to private sector has positive and insignificant effect on poverty eradication in Nigeria. Finally, the findings revealed that interest rate has a negative and insignificant effect on poverty in Nigeria. This result implies that an increase in broad money supply and domestic credit to private sector will lead to a decrease in Poverty level in Nigeria, while an increase in real interest rate will lead to an increase in Poverty level in Nigeria.