Financial Inclusion and Macroeconomic Performance in Nigeria
Abstract
This study empirically investigated the relationship between financial inclusion and three critical dimensions of macroeconomic performance in Nigeria, inflation, aggregate investment, and real gross domestic product in Nigeria over the period 2010Q1 to 2025Q4. Drawing on quarterly time series data sourced from the Central Bank of Nigeria , the National Bureau of Statistics , and the World Bank, the study employed Autoregressive distributed lag model as estimation method, applied to three distinct but interrelated models: inflation – investment - real gross domestic product models. The findings revealed that credit to the private sector, microcredit volume, ATM density, mobile transaction values, and deposit mobilization exerted statistically significant influences on inflation, investment formation, and real output growth. Specifically, deeper financial inclusion contributed to moderate inflation control, stimulated capital formation through SME financing and mobile banking penetration, and accelerated real GDP growth via domestic savings mobilization and broadened credit access. The study concluded that there is the need to integrate financial inclusion targets within the broader monetary and fiscal policy frameworks in Nigeria. And therefore, recommended amongst other things, that strengthening the regulatory framework for mobile money operators to encourage competitive pricing and deepen the adoption of cashless transactions; and channeling a greater share of CBN intervention funds toward microcredit institutions that serve agricultural households and informal sector operator would address both the depth and the geographic breadth of financial inclusion to yield dividends for price stability, capital formation, and long-run output growth across Nigeria.
Keywords
Financial inclusionmacroeconomic performanceinflationinvestmentreal GDMCVARDL
References
Adegbaju, A. A., & Olokoyo, F. O. (2008). Recapitalization and banks' performance: A case study of Nigerian banks. African Economic and Business Review, 6(1), 1–17. Adewale, A., & Ozabeme, B. (2025). Impact of entrepreneurship financing on economic growth in Nigeria. Bayero University Journal of Finance. ISSN Print: 3026-9415 | Online: 3693- 0111. Adusei, M. (2013). Financial development and economic growth: Evidence from Ghana. International Journal of Business and Finance Research, 7(5), 61–76. Ajose, A., Ogundairo, B., & Adewale, C. (2025). Financial inclusion and economic development in Nigeria. NIU Journal of Management Sciences, 11(2), 27–43. ISSN: 3007-1887. Andersen, T. B., & Tarp, F. (2003). Financial liberalization, financial development and economic growth in LDCs. Journal of International Development, 15(2), 189–209. Asongu, S. A., & Nwachukwu, J. C. (2018). Comparative human development thresholds for absolute and relative pro-poor mobile banking in developing countries. Information Technology and People, 31(1), 63–83. Awojobi, O., & Bein, M. A. (2011). Microfinancing for poverty reduction and economic development: A case for Nigeria. International Research Journal of Finance and Economics, 72, 159–168. Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Small vs. young firms across the world: Contribution to employment, job creation, and growth. World Bank Policy Research Working Paper No. 5631. Babajide, A. A., Adegboye, F. B., & Omankhanlen, A. E. (2015). Financial inclusion and economic growth in Nigeria. International Journal of Economics and Financial Issues, 5(3), 629–637. Baumol, W. J. (1952). The transactions demand for cash: An inventory theoretic approach. Quarterly Journal of Economics, 66(4), 545–556. Beck, T., Demirgüç-Kunt, A., & Honohan, P. (2009). Access to financial services: Measurement, impact, and policies. World Bank Research Observer, 24(1), 119–145. Brown, R. L., Durbin, J., & Evans, J. M. (1975). Techniques for testing the constancy of regression relationships over time. Journal of the Royal Statistical Society, 37(2), 149– 192. Central Bank of Nigeria . (2024). Statistical Bulletin. Abuja: CBN Publications. Choi, W. G., & Cook, D. (2004). Liability dollarization and the bank balance sheet channel. Journal of International Economics, 64(2), 247–275. Demirgüç-Kunt, A., & Klapper, L. (2013). Measuring financial inclusion: Explaining variation in use of financial services across and within countries. Brookings Papers on Economic Activity, 2013(1), 279–340. Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366), 427–431. Dickey, D. A., & Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica, 49(4), 1057–1072. EFInA. (2023). Access to Financial Services in Nigeria Survey. Lagos: Enhancing Financial Innovation and Access. Eguavoen and Adekunle (2025). Financial Inclusion and Economic Growth in Nigeria - NIU Journal of Humanities Copyright©2025 Nexus International University ISSN: 3007- 1704; 10(2): 77-86 Ejinkonye, Remigius & Yua, Henry & Chukwuagoziem, Blessed & Mbanefo, Patrick. (2024). EFFECT OF Financial Inclusion on Financial Intermediation in Nigeria: 2000-2021. 60. 337-350. Friedman, M. (1956). The quantity theory of money: A restatement. In M. Friedman (Ed.), Studies in the Quantity Theory of Money (pp. 3–21). University of Chicago Press. Goldsmith, R. W. (1969). Financial structure and development. Yale University Press. Granger, C. W. J., & Newbold, P. (1974). Spurious regressions in econometrics. Journal of Econometrics, 2(2), 111–120. Igbinosa, E.S., & Igbinosa, I.J. (2025). Credit accessibility for SMES and economic growth in nigeria management sciences, Review. Jack, W., & Suri, T. (2014). Risk sharing and transactions costs: Evidence from Kenya's mobile money revolution. American Economic Review, 104(1), 183–223. Kerlinger, F. N. (1973). Foundations of behavioural research (2nd ed.). Holt, Rinehart and Winston. King, R. G., & Levine, R. (1993). Finance and growth: Schumpeter might be right. Quarterly Journal of Economics, 108(3), 717–737. Klapper, L., El-Zoghbi, M., & Hess, J. (2016). Achieving the sustainable development goals: The role of financial inclusion. CGAP and United Nations. Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35(2), 688–726. Levine, R. (2005). Finance and growth: Theory and evidence. In P. Aghion & S. Durlauf (Eds.), Handbook of Economic Growth (Vol. 1A, pp. 865–934). Elsevier. MacKinnon, J. G. (1996). Numerical distribution functions for unit root and cointegration tests. Journal of Applied Econometrics, 11(6), 601–618. McKinnon, R. I. (1973). Money and Capital in Economic Development. Brookings Institution. Mehrotra, A., & Yetman, J. (2015). Financial inclusion — issues for central banks. BIS Quarterly Review, March, 83–96. Migap, J.P., Okwanya, I.,&Ojeka, G. (2015). Financial inclusion for inclusive growth: The Nigerian perspective. International Journal of Information Technology and Business Management, 37(1), 1-8. Mishkin, F. S. (2016). The Economics of Money, Banking and Financial Markets (11th ed.). Pearson. Munyegera, G. K., & Matsumoto, T. (2016). Mobile money, remittances, and household welfare: Panel evidence from rural Uganda. World Development, 79, 127–137. National Bureau of Statistics . (2024). National Accounts and Price Statistics. Abuja: NBS Publications. Neaime, S., & Gaysset, I. (2018). Financial inclusion and stability in MENA: Evidence from poverty and inequality. Finance Research Letters, 24, 230–237. Nwankwo, O., & Nwankwo, N. O. (2014). Sustainability of financial inclusion to rural dwellers in Nigeria: Problems and way forward. Research Journal of Finance and Accounting, 5(5), 24–31. Obademi, Biiranee & Adeyanju, (2025). The Effect of Financial Inclusion on Nigeria’s Real Economic Growth. International Journal of Economics and Financial Issues ISSN: 2146-4138/ http: www.econjournals.com Odhiambo, N. M. (2010). Finance-investment-growth nexus in South Africa: An ARDL-bounds testing procedure. Economic Change and Restructuring, 43(3), 205–219. Ogbeta, et al., (2025) The Contributions of Microfinance Banks to Nigeria’s Economic Growth - Nigeria Journal of Management Studies, Unilag [email protected] Ogunbiyi, S., & Onita, J. (2019). Formal funding sources and economic performance: An ARDL analysis of SMEs in Nigeria. African Development Review, 31(4), 519–533. https://doi.org/10.1111/1467-8268.12412 Oyadeyi O (2023a) Financial development, real sector, and economic growth in Nigeria. SN Bus Econ 3:146. https:// doi. org/ 10. 1007/ s43546- 023- 00526-0 Oyadeyi O (2025a) Financial inclusion, e-payments and economic growth in Nigeria. Int J Financial Innov Bank 3(3):192– 214. https:// doi. org/ 10. 1504/ IJFIB. 2025. 146328 Oyadeyi OO (2025b) Financial innovation and the money demand function in selected African countries: does financial inclusion play a mediating role? Int J Mon Econ Finance 17(6):499–520. https:// doi. org/ 10. 1504/ IJMEF. 2024. 10067 448 Oyadeyi, (2026) Examined Financial development and monetary policy effectiveness on the Nigerian economy/ Financial Innovation (2026) 12:5 https://doi.org/10.1186/s40854-025-00798-5. Oyasor, E. (2025) Financial inclusion and inflation in nigeria/ rsdeca-department of accounting science, Walter Sisulu University. ORCID: https://orcid.org/0009-0004-8746-0700 Ozili, P. K. (2020). Financial inclusion and business cycles. Journal of Financial Economic Policy, 12(2), 287–307. Pam, T. C. ,Pam, Yakubu, G., and Kairo, C. I. (2022 ). Effect of Financial Inclusion and Literacy on Poverty Reduction in North Central Nigeria; International Journal of Economics, Commerce and Management, ISSN 2348 0386 Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. Phillips, P. C. B., & Perron, P. (1988). Testing for a unit root in time series regression. Biometrika, 75(2), 335–346. Reserve Bank of India. (2008). Report on currency and finance 2006–08. Reserve Bank of India. Sahay, R., Čihák, M., N'Diaye, P., Barajas, A., Bi, R., Ayala, D., ... Yousefi, S. R. (2015). Rethinking financial deepening: Stability and growth in emerging markets. IMF Staff Discussion Note SDN/15/08. Sarma, M., & Pais, J. (2011). Financial inclusion and development. Journal of International Development, 23(5), 613–628. Schumpeter, J. A. (1934). The Theory of Economic Development. Harvard University Press. Shaw, E. S. (1973). Financial deepening in economic development. Oxford University Press. Stolbov, Mikhail (2012) : The finance-growth nexus revisited: From origins to a modern theoretical landscape, Economics Discussion Papers, No. 2012-45, Kiel Institute for the World Economy , Kiel World Bank. (2022). Global findex database 2021: financial inclusion, Digital Payments, and Resilience in the Age of COVID-19. World Bank Group.
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
Document Governance and Organizational Learning Among Administrative Officers of Agricultural Research Institutes in Southwest Nigeria
Author: Titilayo Juliet Sodiyan1 Oluwatosin A. Ologboosere2
Macroeconomic Policies and Economic Stability in Nigeria
Author: Abel-Tariah Emmanuel Onate, Okon, Ekanem Nsikhe, Nwenyi Francis Onwe
Oil Price Shocks and Macroeconomic Adjustment: Evidence on Exchange Rate, Inflation, and Interest Rate Dynamics in Nigeria
Author: F. A. Adebimpe, A. A. Onabote
Determinants of Bank Liquidity in Nigeria
Author: Nelson Johnny Ebifemo-ere Stephen