FINANCIAL INCLUSION: AN EMPIRICAL STUDY ON NIGERIA ECONOMIC DEVELOPMENT

Ukoh, Josephine Ekperechukwu (PhD)
Department of Banking and Finance
Nnamdi Azikiwe University, Awka
Mail: je.ukoh@unizik.edu.ng

Abstract

This study examined financial inclusion on economic development in Nigeria. From various empirical works reviewed, there is still an insufficient all-inclusive financial system to address the ongoing challenges facing the Nigerian economy which has hindered the promotion of greater inclusion and prosperity for all Nigerians. The study therefore, examines the relationship between money supply and value of ATM/POS transactions and economic development in Nigeria. The study was anchored on Financial Intermediation theory and Great Spurt theory. The  study used data obtained from Central Bank of Nigeria (CBN) and World Bank Indicator and subjected them to Auto Regressive Conditional Heteroskedasticity (ARCH) technique to test the interaction between independent variables; money supply and value of ATM/POS transactions with the dependent variable namely Human Development Index at 5% level of significance. The findings showed that Money Supply significantly explained the variation in Human Development Index in Nigeria and values of ATM/POS transactions have no significant effect or variation in Human Development Index within the period under review in Nigeria. Thus, the study concluded that financial inclusion had mixed effect on economic development in Nigeria. Hence, the study recommended among others that the government should ensure that the credit to the private sector should be channeled such that urban areas who are more of agricultural production and major instigator of industrial materials will help speed up swift economic development in Nigeria.

Keywords: Money supply, ATM/POS transactions and Economic development