Financial inclusion and sustainable development in Nigeria

Abstract

Aim/purpose-Financial inclusion is a catalyst for achieving sustainable development. This study attempts to evaluate impact of financial inclusion on sustainable development. Design/methodology/approach-Both Error Correction Model (ECM) and Fully Modified Ordinary Least Square (FMOLS) were used to ascertain the short-run and long-run relationship respectively among the variables which covers the period from 2001 to 2016, as data for HDI (Human Development Index) were available for Nigeria from 2001 through 2016 only. Findings-The result of the analysis indicated that in the short-run there is short-run causality running from a number of commercial bank branches, demand deposit from the rural areas, loan to rural areas to HDI. The long-run result revealed that the explanatory variables consisting of loan to rural areas, number of commercial bank branches and demand deposit from the rural areas all have positive significant impact on HDI in Nigeria. The overall result revealed that financial inclusion has impact on sustainable development in Nigeria. Research implications/limitations-The study recommends that banks and monetary authorities should develop new product and services that will attract savings from the rural dwellers because of the level of significance of their deposit to the development of the country. All the more so as commercial banks should also ensure that the rural dwellers are provided with more bank branches, most especially, in areas where there are few or no banks. Credit facilities should also be provided to the people at an affordable rate as this will uplift the level of inclusion and reduce the level of exclusion in the country which will improve the sustainable development in the country. Originality/value/contribution-Empirically, the study attempted to investigate the impact of financial inclusion on sustainable development in Nigeria. The results of the study suggest that government should continue its effort in the area of poverty alleviation by embracing financial inclusion via a vis financial institutions introducing new financial product and services at lower cost that will cater for the disadvantaged group in the society.

Financial inclusion and education: An empirical study of financial inclusion in the face of the pandemic emergency due to Covid‐19 in Latin America and the Caribbean

“…The results confirm that increasing inequality in the distribution of income decreases financial inclusion. Moreover, the HDI increases financial inclusion in the countries studied (Ade'Soyemi et al, 2020 ).…”

Re-examining the nexuses of communicable diseases, environmental performance, and dynamics of sustainable Development in OECD countries

“…Finally, financial development helps access many services, including those available through basic infrastructure such as freely accessible medical facilities through health cards, income support program cards, and other banking facilities through the ATMs, which have recently been introduced in emerging countries like Pakistan. So, even though the impact of financial development upon the general welfare of the inhabitants as measured by the human development index (HDI) and financial stability has already been reported in many studies, namely Soyemi et al ( 2020 ) and Feghali et al ( 2021 ), respectively, there have been pressing recommendations studies cited above to investigate further the role of financial development in the uplift of the general well-being of the masses.…”

Mobile Banking: An Innovative Solution for Increasing Financial Inclusion in Sub-Saharan African Countries: Evidence from Nigeria

“…The need to achieve the sustainable development goals brings to the attention of the authorities a pressing issue, namely the complexity of the phenomenon, the multitude of tools that could be used to achieve the set targets, the large number of stakeholders involved or that may be involved and the lack of financial funds [24][25][26][27]. For these reasons, financial inclusion has become important, both at the microeconomic and macroeconomic levels, as it can be a tool for promoting the principles of sustainable development [28][29][30][31][32][33][34][35][36].…”

“…Financial inclusion is not only a concern of financial institutions that are trying to attract more and more categories of consumers and have a responsible attitude towards them but also of public authorities [33,[37][38][39][40][41][42]. In fact, there are specialists who consider financial inclusion, for some countries, even a catalyst for sustainable development, a tool for poverty reduction and a facilitator of economic growth [27,[43][44][45]. Financial inclusion is a complex concept in a continuous evolution taking into account the transformations that are taking place worldwide from an economic, social and political point of view.…”

“…In developing countries, financial exclusion is fuelled by the country's economic structure (mainly agriculture), the location of the majority of the population is in the rural areas with poor banking intermediation and low spread of money deposit bank branches across different parts of the country due to the policy of commercial financial institutions [27]. Other factors that limit the financial inclusion of the population are bureaucracy, high costs of banking products and services and distance [52,74,75].…”