IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 11 NO. 1 2025
DOI: 10.56201/ijebm.vol.11.no1.2025.pg165.182

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Financial Inclusion and Economic Growth in Nigeria

Slemem Lamba, Freeman Aye-Agele (Ph. D), Godfrey O. Ojeka (Ph. D)

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Abstract

This study examines the impact of financial inclusion on economic growth in Nigeria from 1992 to 2022. The study adopted analytical research design while finance-led growth theory was adopted as the theoretical framework. The data used were obtained from CBN statistical bulletins for data on bank credits or loans and bank branches and World Bank and World Development Indicators, 2022 for data on economic growth rate. The study conducted correlation test, unit root test, ARDL bound test for co-integration to analyze the data. The ARDL results revealed that a unit increase in financial inclusion reduced economic growth by 5.14 units. It therefore means that financial inclusion increase access to financial credits that promotes economic growth. However, if the borrowed funds are channeled into consumption or unproductive sectors rather than investment in growth-enhancing activities, it can negatively affect economic growth. The study therefore concluded that financial inclusion has a positive impact in promoting economic growth in Nigeria for the period under review. The study therefore recommended that government and policymakers should reassess the current financial inclusion strategies to prioritize productivity- enhancing sectors such as agriculture, manufacturing and technology. It further recommended the encouragement of financial literacy programs that enlighten people on the importance of increased access to financial products and services.

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