Financial Inclusion Index in Nigeria: An Exploratory Analysis

Abstract

This study aims to develop a financial inclusion index for Nigeria. Analysis of secondary data on composite value of demand, time, saving and foreign deposits of deposit money banks in Nigeria (DTSFD), number of branches (BBR), deposit in rural branches (DRB), loans granted to customers in rural areas (LRA), volume of transactions via ATM (VATM), volume of transactions via mobile bank (VMP), volume of transactions via POS (VPOS), and volume of transactions via webpay (VWBP) obtained from the Central Bank of Nigeria Statistical Bulletin, 2018 using the Principal Component Analysis (PCA) identified number of bank branches, deposits in bank branches in rural areas, volume of transactions via POS, volume of transactions via the ATM, loans to account holders in rural areas and volume of transactions via webpay as the determining variables for measuring the level of financial inclusion in Nigeria. Efforts by monetary authorities at improving financial inclusion in Nigeria should focus on the variables in this index.