Testing the impact of financial inclusion on income convergence: Empirical evidence from Nigeria

Abstract

Financial inclusion, as a key pillar for inclusive development, has long been considered as an important instrument for reducing poverty and income inequality. However, the income convergence effect of financial inclusion remains only partially explored. Using longitudinal data covering three survey waves on Nigerian households, this study explores the potential of financial inclusion as an instrument for reducing income disparity. After controlling for the endogeneity issues, the results of instrumental variable linear and quantile regressions consistently show a strong nexus between financial inclusion and per capita income. This positive effect is experienced by all households regardless of income distribution. The decomposition results reveal that ab initio, financial inclusion resulted in income divergence leading to widening inequality across the households with various income distributions. However, the income convergence started from the middle to the higher income household categories, with the lowest income lagging behind in the second wave. The lowest income households eventually converged in the data of the third wave. In this sense, it can be argued that financial inclusion could play an important role in the reduction of income inequality.

What drive gender gap in financial inclusion? Evidence from Cameroon

“…Thus, eliminating the gender gap is of great importance, because this will promote women's entrepreneurship and also increase their decision-making power and economic empowerment. This will, therefore, lead to more inclusive growth and national well-being (Demirgüç-Kunt et al, 2013;Ibrahim & Aliero, 2020).…”

Efficacité du dispositif d'accompagnement à l'insertion professionnelle des jeunes au sénégal

“…Les méthodes d'appariement du plus proche voisin avec remplacement, du noyau et du rayon avec un caliper de 0,01 sont utilisées pour l'estimation de l'impact moyen du traitement sur les traités. Plusieurs auteurs ont comparé ces procédures d'appariement (Becker & Ichino, 2002; Caliendo & Kopeinig, 2008; Ibrahim & Aliero, 2020). Ils ont conclu qu'aucune des méthodes n'est a priori supérieure à l'autre.…”

Impact of Financial Inclusion on Household Welfare in Nigeria

“…The execution of the National Financial Inclusion Strategy in 2012, as well as the effective shift from a repressive to a liberalized financial sector, contributed to this success [2]. Unfortunately, these initiatives did not last beyond 2014, which coincided with the low point in crude oil prices [18]. For example, according to some stylised data, Nigeria's financial inclusion rate has declined from 48.6 percent in 2014 to 38.3 percent in 2016.…”