Nigerian Journal of Banking and Financial Issues (NJBFI)

IMPACT OF FINANCIAL INCLUSION ON SUSTAINABLE ECONOMIC GROWTH

Abstract

The study examined the impact of financial inclusion on economic growth in Nigeria between 1982 and 2023. The major motivation for the study was the recent emphasis placed on financial inclusion which was met with paucity of empirical studies in Nigeria. In the light of this necessity, the study used gross domestic product as the dependent variable and deposits with rural commercial banks, loans from rural commercial banks, interest rate and monetary policy rate as independent variables. The study employed the classical Ordinary Least Square; ARDL and Pairwise causality techniques, the analysis revealed that financial inclusion had positive effect on economic growth in the short run with an insignificant effect on growth in the long run. The causality test reported that economic growth causes financial inclusion especially through the channels of loans made available to the rural populace. Thus, it was recommended that provision of funds as loans to rural populace at lower interest rate would strengthen the establishment of financial inclusion in the economy.