Financial Inclusion and Economic Growth: Empirical Evidence from Nigeria

Abstract

This study empirically investigates the influence of financial inclusion on economic growth and the causality between financial inclusion and economic growth in Nigeria using Ordinary Least Squares (OLS) and Granger Causality Test. Findings suggest that financial inclusion significantly contributed to Nigeria’s economic growth over a period of thirty-six years (1982-2017). The coefficient of determination indicated that 99.95% of variations in economic growth can be explained by the changes in financial inclusion variables. The study further shows evidence of unidirectional causality between financial inclusion and economic growth. It is recommended among others that there should be increased financial intermediation for small businesses and robust credit financing programmes for private enterprises. The study also recommended that conscious and collaborative efforts must be made to achieve financial literacy through intense enlightenment programme while government policies should be directed towards enhancing financial inclusion activities geared towards economic growth.