Financial Inclusion and Economic Growth in Africa: Insight from Nigeria

Abstract

Universally, all inclusive financial system indeed promotes economic growth. It is on the basis of this motivation that the study is primarily design to investigate the influence of financial inclusion on the growth of African economy, using Nigeria as a case study. Extrapolated time series financial inclusion data from Nigeria, covering the period of 1981 to 2013 were used in the analysis. The multiple regression models anchored on Ordinary Least Square technique is adopted in estimating the contributions of the variables. While controlling for other macroeconomic exogenous variables; the results show that financial inclusion has significant negative impact on the growth of Nigeria economy over the years. The researcher attributes the result to high level of financial exclusion of bankable adult citizens in Nigeria in particular and Africa in general. The researcher suggests more inclusive financial system in Nigeria (and Africa) with focus on the rural populace because ‘growth is good, sustained high growth is better and sustained high growth with financial inclusiveness is best of all’ especially in the developing economy.

Keywords: Financial inclusion, Financial exclusion, Economic growth, Nigeria