Effect of financial inclusion on entrepreneurial growth in retail and wholesale sub-sectors: Evidence from Nigeria

Financial inclusion has been globally recognised as essential for capital accumulation, easy financial services accessibility, poverty alleviation as well as entrepreneurial and economic growth. As Nigerian government is making progress in the achievement of financial inclusion, many businesses seems to be springing up in the financial and other economic sectors with intention to tap from the growing access to official financial services. This paper aims at ascertaining the effect of financial inclusion (FI) on entrepreneurial growth (EG) in retail and wholesale sub-sectors in Nigeria using quarterly data from the World Bank's World Development Indicators and the Central Bank of Nigeria. Data were analysed using correlation analysis and error correction approach. The results reveal that FI has a significant positive effect on EG particularly in the context of the retail and the wholesale subsectors contributions to gross domestic product (GDP). The results further indicate that account ownership (ACN) did not have significant influence on the growth rate of the retail and the wholesale sub-sectors, while commercial bank branches (CMB) was found to have significant influence on the growth rate of the retail and the wholesale sub-sectors. This implies that CMB is a critical FI channel with potentials of driving the EG particularly in the context of the retail and the wholesale sub-sectors contributions to GDP. We recommend that government should establish more CMB in all rural areas in Nigeria for easy access to official financial products by the unbanked entrepreneurs. Also, FI stakeholders should deepen efforts in encouraging ACN through improving on financial literacy of the vast unbanked populace so that formal financial system through capital accumulation can serve the needs of entrepreneurs for effective growth and contributions to GDP.