Nigerian Journal of Banking and Financial Issues (NJBFI)

Impact Of Financial Inclusion On Bank's Performance In Nigeria

Abstract

Financial inclusion is seen as a solution to solve the problem of poverty and income inequality. In many developing countries like Nigeria, mortgage banks are seen as the traditional channel for bringing the unbanked into the formal financial system. The increasing diversity of customer demands and technological changes are expected to have a significant impact on the management of the bank in order to retain and attract potential customers and investors in the banking sector. However, with the increase in income levels, location and number of banking branches, the management of banks has to identify banking services to improve their banking performance (return on assets). Therefore, this study examines the impact of financial inclusion on the performance of banks in Nigeria. Specifically, the study examines how banking performance is affected by ATMs, branch network, number of bank accounts and location of sales terminals. The study used all DBMs in Nigeria between 2013 and 2018 using data compiled on the basis of least squares. The results of the study show that the effect of ATMs, banking location, towers, performance of bank depository (ATM, BET and POS on ROA of DBMs) in Nigeria is positive and significant by 0.05. It is concluded that FI applications have proven to have a significant impact in improving customer satisfaction and bank profitability. It is recommended that to ensure that DMB services reach and serve the poor, financial institutions should not only upgrade their processes (using technological innovations), but also develop process and reasonable procedures to evaluate potential customers and ensure fairness in the selection process.