Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Financial Inclusion and Human Capital Development in Nigeria

Slemem Lamba

Abstract

This study examines the relationship between human capital development and financial inclusion in Nigeria using time series data from 1992 to 2022. Causal research design was adopted with financial literacy theory as the theoretical anchor. The data were analyzed using the ARDL model, correlation analysis, unit root test, ARDL bound test for co-integration, and Granger causality test. The ARDL results revealed a positive and statistically significant relationship between financial inclusion and government health expenditure (unit increase increases financial inclusion by 0.0021%). Mortality rate has a negative and statistically significant impact on financial inclusion (unit increase reduces financial inclusion by -0.002%). Primary school enrollment has a positive and statistically significant effect on financial inclusion (unit increase increases financial inclusion by 0.001%). The Error Correction (ECM) term (-0.712578) is negative and highly significant, indicating that the model would converge to the short-run equilibrium within 7 months. The study concluded that government health expenditure and primary school enrollment have positive, statistically significant relationships with financial inclusion, while the mortality rate has a negative, statistically significant relationship. The study recommends that the health sector be well-equipped to provide efficient and adequate health care services to improve human capital and positively influence financial inclusion.

Keywords

Financial inclusionHuman capital developmentNigeriaEffect

References

Ababio, J., Botchwey, E., Assibey, E. & Barnor, C. (2020). Financial inclusion and human development in frontier countries. International Journal of Finance and Economics, 26 (1), 42-59. Abdelaziz, H. & Helmi, H. (2019). Financial development and human development: A non-linear analysis for Oil-exporting and Oil-importing countries in MENA region". Econ Bull 39(4):2484-2498. Abdelghaffar, R. A, Emam, H. A. & Samak, N. A. (2023). Financial inclusion and human development: is there a nexus? Journal of Humanities and Applied Social Sciences, 5 (3), 163-177. Adeniyi, A.M., Akabi, B.& Olayinka, O.E.(2023). Financial Development and Human Development in Nigeria. Journal of ERSA, 10 (1), 199-213. Asongu, S. & Rexon, N. T (2021). The role of finance in inclusive human development in Africa. Biswas, G.K. (2023). Financial inclusion and its impact on economic growth: An empirical evidence from South Asian Countries. European Journal of Business and Management Research, 2(4),34-45. Chowdhury, E. K., & Chowdhury, R. (2023). Role of financial inclusion in human development: Evidence from Bangladesh, India and Pakistan. Journal of the Knowledge Economy, 1-26. Datta, S. & Singh, K. (2019). Variation and determinants of financial inclusion and their association with human development: a cross-country analysis. IMB Management Review, 31, 336-349. Demir, A., Pesqué-Cela, V., Altunbas, Y. & Murinde, V. (2022). Fin-tech, financial inclusion and income inequality: a quantile regression approach. European Journal of Finance, 28(1):86-107. Dogan, E., Madaleno, M. & Taskin, D. (2022). Financial inclusion and poverty: evidence from Turkish household survey data. Appl Econ 54(19):2135-2147. Ferraz, D., Mariano, E. Rebelatto, D. & Hartmann, D. (2020). Linking human development and Geraldes, H., Gama, A. & Augusto, M. (2022). Reaching financial inclusion: necessary and sufficient conditions, Social Indicators Research, doi: 10.1007/s11205-021-02850-0. Huang, W., Gu, X., Lin, L., Alharthi, M., & Usman, M. (2023). Do financial inclusion and income inequality matter for human capital? Evidence from sub-Saharan economies. Borsa Istanbul Review, 23(1), 22-33. Kamalu, K. & Wan Ibrahim, W. H. B. (2021). Financial Inclusion and Human Development in OIC Member Countries: Evidence from Panel Quantile Regression Method. Iranian Econ Rev 27:377-404. Kaya A (2018) Finansal Piyasalardaki Geli, smelerin Insani Geli, smi, slik \"Uzerine EtkisiTurkiye \"Orne gi. Uluslararas? Iktisadi ve Idari Incelemeler Dergisi (20): 169-180. Khalil, S., Jouini, J. & Othma, A. (2023). Impacts of financial inclusion on human capital development in the Arab region. Arab Monetary Fund May 2023. Economic Studies, 115-2023. Khan, I. Khan, I. Sayal, A.U. & Khan, M. Z. (2022). Does financial inclusion induce poverty, income inequality, and financial stability: empirical evidence from the 54 African countries. Journal of Economic Studies, 49(2):303-314. Kilic, C. & Ozcan, B. (2018). Impact of financial development on human capital: Evidence from emerging market economies. International Journal of Economics and Financial Issues, 8(1), 52-58. Mani, P., Nyamute, W. and Odigo, H. (2024). Financial inclusion and human development: Evidence from African countries. European Journal of Business and Management Research, 9 (3), 9-19. Matekenya, W. & Jeke, L. (2022). Financial inclusion and human development: evidence from sub-Saharan Africa. Development Southern Africa, 38 (5), 683-700. Matekenya, W., Moyo, C. and Jeke, L. (2020). Financial inclusion and human development: evidence from sub-Saharan Africa. Development Southern Africa, 38 (5), 683-700. Musah, A. (2022). Financial inclusion as a gateway to human development in Africa. International Journal of Business and Technology Management, 4(4), 76-82. Omokanmi, O., & Ogunleye, O. (2020). Financial inclusion and human development in Sub-Saharan Africa. IOSR Journal of Economics and Finance, 11(1), 1-9. Rahmi, N. (2020). Financial inclusion and human capital investment in urban and rural: A case of Aceh Province. Regional Science Inquiry, 12(1), 47-54. Sakanko, M. A., Abu, N. & David, J. (2019). Financial Inclusion: A Panacea for National Development in Nigeria. Proceedings of 2nd National Conference of the Faculty of Social Sciences, Federal University Lafia, Nigeria, captioned: \"Emerging Socio Economics and Political Challenges and National Development\" held on Sept. 22-24, 2019. Sarwar, A., Khan, M. A., Sarwar, Z. & Khan, W. (2021). Financial development, human capital and its impact on the economic growth of emerging countries. Asian Journal of Economics and Banking. Sarma, D. (2016). Nexus between financial inclusion and economic growth: Evidence from the emerging Indian economy. Journal of Financial Economic Policy, 8(1), 13-36. Soyemi, K., Haruna, Y. &Olowofela, O. (2020). Financial inclusion and sustainable development in Nigeria. Journal of Economics and Management, 39(1), 105-131. Tekin, B. (2020). The nexus between financial development and human development: Thecase of developing countries. Journal of Emerging Economies and Islamic Research,8,73-87. Thathsarani, U., Wei, J. & Samaraweera, G. (2021). Financial inclusion\s role in economic growth and human capital in South Asia: an econometric approach. Sustainability, 13 (4303), 1-18. Tissaoui, T., Hakimi, A. & Zaghdoudi, T. (2024). Can financial inclusion enhance human capital? Evidence from low- and middle-income countries. Journal of Humanities and Social Sciences Communication. Oladipo, O., Ogunjobi, A., Adigile, D., Ogini, M., & Soroh, O. (2023). Financial inclusion, human capital development and economic growth in sub-Saharan Africa. Journal of Economic and Administrative Sciences, 38(4). Adeniyi, A. M., Akanbi, B., & Olayinka, O. E. (2023). Financial inclusion and human capital development in Nigeria: An ARDL approach. Journal of Economic and Administrative Sciences, 38(4). Chowdhury, E. K., & Chowdhury, R. (2023). The effect of financial inclusion on human capital development: A time series analysis. Journal of Financial Economic Policy, 15(4). Huang, W., Gu, X., Lin, L., Alharthi, M., & Usman, M. (2023). Financial inclusion and human capital: The moderating role of income inequality. Borsa Istanbul Review, 23(1).

More Articles from INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT

Bridging Legal, Financial, and Data Governance in Enterprise AI: Emerging Trends

Author: Funmilayo Ashore-Onisemo, Ebehiremen Faith Iziduh, Uchechi Mary-Linda Unamma, Ifeanyichukwu Jeffrey Okwesa

Macroeconomic Policies and Economic Stability in Nigeria

Author: Abel-Tariah Emmanuel Onate, Okon, Ekanem Nsikhe, Nwenyi Francis Onwe

Determinants of Bank Liquidity in Nigeria

Author: Nelson Johnny Ebifemo-ere Stephen