Nigerian Journal of Banking and Financial Issues (NJBFI)

FINANCIAL INCLUSION AND POVERTY ALLEVIATION IN NIGERIA

Abstract

This research analyzes and examines the effect of financial inclusion on reducing poverty in Nigeria. Specifically, it assesses:  the extent to which Microfinance Bank Branches increases access to loanable funds for vulnerable households. A quantitative research design was adopted, utilizing secondary data from the Central Bank of Nigeria’s Statistical Bulletins, complemented by data from the World Bank Financial Inclusion Index and the World Development Indicators (WDI) published by the International Monetary Fund. The X-ray of the Findings shows that R-square stood at 72% which explained the rate at which financial inclusion is responsible for the variation in poverty index. The F-statistics value of 10.80765 shows that the independent variables are statistically significant at 95% levels. Microfinance Bank Branches (MBB) Coefficient stood at 0.002033 which is statistically significant (p-value 0.00010<0.05) at 95% levels. Also, the estimated coefficient for depositors in microfinance banks (DMB) per 1000 adult is 1.008432 with (p-value 0.00004<0.05), at 95% level of Significant. Automated teller machine (ATM) per 100,000 adults’ coefficient estimation of 0.001087 with statistically significant (p-value 0.00008<0.05) at 95% levels and Borrowers of Microfinance banks (per 1000 adults) is 0.002O67 with statistically significant (p-value 0.00005<0.05) at 95% levels. Given credence to the reported coefficient on the adopted surrogate which implies that financial inclusion is a major policy driver for poverty alleviation. The study therefore, recommends among other thing that the government should continue to promote and expand financial inclusion initiatives, particularly in underserved rural areas, to further strengthen economic development and poverty reduction efforts in Nigeria.