IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 11 NO. 2 2025
DOI: 10.56201/ijbfr.vol.11.no2.2025.pg13.25

---

Assessment of the Impact of Financial Innovation and Its Role in Creating Financial Inclusion in Nigeria

Nguevaga, John, Bako, Abubakar

---

Abstract

The advancement in financial instrument, financial technology and payment system is what leads to the emergence of financial innovations. In this study, the aim is to assess the impact of financial innovation and its role in creating financial inclusion in Nigeria from 2009 to 2022. Data were collected from CBN statistical bulletin 2022 and macrotrend. The specific objectives of the study were to determine the impact of volume of ATM on availability of banking service; to determine the impact of Volume of POS on availability of banking service; to determine the impact of volume of MOB on availability of banking service and finally, to determine the impact of volume of WEB transactions on availability of banking service. The method of data analysis used is Autoregressive Distributed Lag model. The study found that volume of ATM has significant impact on availability of banking service at 10% significance level in the short-run but not significant in the long-run. Furthermore, volume of POS, MOB, and WEB transaction has insignificant impact on availability of banking service in the short-run and long-run. The variables exhibited negative effect which means the increase in the volume of the financial innovation products usage decrease the frequency of visit of the bank halls which cause reduction in the number of bank branches but at insignificant level. In conclusion, the study found that financial innovation has negative insignificant impact on financial inclusion in Nigeria due to poor infrastructure, and lack of financial literacy.

keywords:

Financial innovations, Financial technology, Financial inclusion

---

References:

Bariviera, A. F., Guercio, M. B., Martinez, L., & Rosso, O. A. (2017). A comparative
analysis of the financial innovation efficiency of developed countries. Journal of
Business Research, 70, 263-269.
Beck, T., Chen, T., Lin, C., & Song, F. (2018). Financial innovation: The bright and
the dark sides. Journal of Banking and Finance, 97, 330-336.
Black, J. (2011). Financial innovations and their role in the modern financial system –
identification and systematization of the problem. Ministry of Science and
Higher Education. 13-26.
Böhme, R., Claussen, J., & Heitzig, J. (2019). Innovation and competition in internet
and mobile banking: An industrial organization perspective. Journal of Banking
and Finance, 98, 1-10.
Cáamara, N. & Tuesta, D. (2014). Measuring financial inclusion: A multidimensional
index. BBVA working Paper No. 14/26.,1-35.
Chen, (2021) https://www.investopedia.com/terms/f/financial-innovation.asp
Ehiodu, V.C., Onuorah A.C. & Okoh E. (2021). Automated teller machine (ATM)
penetration and financial inclusiveness in Nigeria: A Tripod Banking System
Approach. Indian Journal of Economics and Business, 20(3). 1093 – 1104.
Gallagher, K. P., & McGahan, A. M. (2017). The elephant in the room: A cautionary
note on the use of patents in the analysis of financial innovation. Journal of
Financial Stability, 30, 179-185.
Gomber, P., Koch, J. A., & Siering, M. (2018). Digital finance and FinTech: Current
research and future research directions. Journal of Business Research, 98, 365-
Haldane, A. G. (2019). Towards a finance facility for social investment. Journal of
Financial Stability, 41, 81-90.
Haruna, H. A., & Dibal, H. S. (2024). Effect of financial technology on financial
inclusion in Nigeria: autoregressive distributed lag approach. FULafia
International Journal of Business and Allied Studies (FIJBAS), 2(3), 18-35.
Hu, J., Zhang, Z., & Yuan, C. (2018). Financial innovation and patent applications in
China. China Economic Review, 51, 1-14.
Iwedi M., Owakah N.F., Wofuru-Nyenke O.K. (2023), Effect of Financial Technology
on Financial Inclusion in Nigeria. African Journal of Accounting and Financial
Research 3(1), 21- 36
Kama, U. & Adingu, M. (2013). Financial inclusion in Nigeria: issues and challenges.
Central Bank of Nigeria Occasional Paper No. 45, 1-45.
Koijen, R. S., Moskowitz, T. J., Pedersen, L. H., & Vrugt, E. B. (2018). Carry. Journal
of Financial Economics, 127, 197-225.
Nair, S.B. (2013). Financial Inclusion: The Indian model introduction, being a paper
presented at the workshop of Financial Inclusion: making financial inclusion
work in Nigeria. Organized by the Chartered Institute of Banking of Nigeria,
July, 2013.
National Financial inclusion strategy NFIS Revised (2018) October, Abuja.
Nwome, M. F., Egwu, E. L. & Ikoh, I. M. (2024). Effects of financial innovations on
the financial inclusion in Nigeria. International Journal of Marketing and
Communication Studies, 8(2), 103-130.
Nwosu, C. P., Oji-Okoro, I., & Anih, O. D. (2020) Fintech evolution and development
in Nigeria in Nigeria: lessons from other jurisdiction. Central Bank of Nigeria
Occasional Paper no. 76, 1-70.
Ogbeide, S. O. & Obadeyi. J. (2023). Financial innovation mechanisms and economic
progress: a review of literature. Nigerian Journal of Banking and Financial
Issues (NJBFI), 9(1), 59-74.
Ozili, P.K. (2021). Financial Inclusion in Nigeria: Determinants, challenges and
achievements, Electronic Journal
Rajan, R. (2015). Competitive monetary easing: is it yesterday once more?.
Macroeconomics and Finance in Emerging Market Economies, 8(1-2), 5-16.
Siddik, M.N.A., Kabiraj, S. (2020). Digital finance for financial inclusion and inclusive
growth. In: Digital transformation in business and society (155–168). Cham:
Palgrave Macmillan.
Ugwuanyi, L. & Okore, O. A. (2022). Financial Technology and Financial Inclusion in
Nigeria.
Mohd Naimi , M.N, Shafie, R. & Wan, N.W.H.(2020). Corporate governance and audit report lag
in Malaysia. Asia Academy of management.
6(2),109-
119
Ohaka, J., & Abio, I. T. (2019). Audit committee independence and corporate financial reporting
quality in aluminum corrugating companies in rivers state. International Journal of
Economics and Financial Management, 3(1), 2545-9566.
Ofoegbu, G. N., & Okoye, J. M. (2019). Effect of Audit Committee Characteristics on Financial
Reporting Quality of Quoted Companies in Nigeria. Journal of Economics and Finance,
10(1), 59-69.
Oji, O., & Ofoegbu, G. N. (2019). Effect of audit committee qualities on financial reporting of
listed companies in Nigeria: A perspective study. International Journal of Scientific and
Research Publications, 7(10), 278-290.
Okolie, A. O., Izedonmi, F. I. O., & Enofe, A. O. (2014). Audit Quality and Cash-Based Earnings
Management of Quoted Companies in Nigeria. Research Journal of Finance and
Accounting, 5(2), 1-14. Available at IDEAS RePEc.
Okolie, A. O., Izedonmi, F. I. O., & Enofe, A. O. (2013). Audit Quality and Accrual-Based
Earnings Management of Quoted Companies in Nigeria. Journal of Accounting and
Finance Research, 2(1), 123-132.
Panda, H., & Lespsa, G. (2020). Audit Committee Characteristics and Financial Reporting Quality
of Listed Firms in Nigeria. European Journal of Business and Management, 7(8), 29-40.
Raweh, N. A. M., Kamardin, H., & Malik, M. (2019). Audit committee characteristics and audit
report lag: Evidence from Oman. International Journal of Accounting and Financial
Reporting, 9(1), 152-169.Available at: https://doi.org/10.5296/ijafr.v9i1.14170.
Raweh, N. A. M., Kamardin, H., & Malik, M. (2019). Audit committee characteristics and audit
report lag: Evidence from Oman. International Journal of Accounting and Financial
Reporting, 9(1), 152-169.Available at: https://doi.org/10.5296/ijafr.v9i1.14170.
Tang, Q; Chen, H; & Zhijun, A. (2020). Financial reporting quality and investor protection: A
global investigation, Working Paper
Umobong, A. A., & Ibanichuka, E. (2019). Audit committee attributes and financial reporting
quality of food and beverage firms in Nigeria. International Journal of Innovative Social
Sciences and Humanities Research, 5(2), 1-13.
Walker, J.O. (2019). Audit committee effectiveness and audit quality of Nigerian money deposit
banks, Department of Accounting, (2012), Nasarawa State University, Keffi.

DOWNLOAD PDF

---

Back