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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 innovationsFinancial technologyFinancial inclusion

References

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