Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

Abstract

This study investigated the relationship between financial inclusion and financial performance of deposit money banks in Nigeria from 2011 to 2021. The specific objectives were to investigate the relationship between customers loan and return on assets of deposit money banks in Nigeria; determine the relationship between customers deposit and return on assets of deposit money banks in Nigeria; evaluate the relationship between bank branches spread and return on assets of deposit money banks in Nigeria; ascertain the relationship between online banking and return on assets of deposit money banks in Nigeria; and investigate the relationship between agent banking and return on assets of deposit money banks in Nigeria. The study employed ex post facto and correlation research design with secondary data obtained from the Central Bank of Nigeria and financial institutions of deposit money banks. The population of the study consisted of all listed deposit money banks and a sample size of ten (10) was employed for data analyzing using univariate, bivariate and multivariate analysis. The results indicated a positive and significant relationship between loans to customers, deposits by customers, bank branches, mobile banking and agency banking on return on assets of deposit money banks. The study concluded that financial inclusion positively influences the level of financial performance of deposit money banks. On the basis of the conclusion, the paper recommended amongst others that financial inclusion innovation methods should be stressed in the financial sector through Central Bank of Nigeria (CBN) regulatory and advisories since it leads to improved financial performance and efficiency. In addition, the study also recommends that deposit money banks in Nigeria should invest more on agency, internet banking and ATM services to include the excluded people in financial services and products throughout the country since they provide significant influence on the financial performance of deposit money banks.