Financial Inclusion and Economic Growth in Nigeria

This study examines the effect of financial inclusion on economic growth in Nigeria. The study used annual times series data from 1991-2022 while the historical data research design was employed for the study. The unit root tests were conducted using the Augmented Dickey Fuller (ADF) and the Phillipps-Perron techniques. The data were analyzed using the Autoregressive Distributed Lag (ARDL) model and diagnostic tests such as Cusum of squares test, BreuschGodfrey serial correlation LM test, Ramsey Reset test, Correlogram Q-statistic, Histogram Normality test and the Granger Causality test were also conducted. The findings from the longrun analysis indicates that Aggregate of loan-to-deposit ratio positively influence the Gross Domestic Product. Conversely, Loans of rural branches of commercial banks negatively but insignificantly influence the Gross Domestic Product. Furthermore, the Deposit of rural branches of commercial banks has a negative and significant impact on the Gross Domestic Product. Therefore, the study concludes that financial inclusion has significant effect on the Gross Domestic Product in Nigeria. Finally, the study suggests that Deposit Money Banks should establish more rural branches as well as develop less complex financial products that the financially excluded populace can access. This is expected to enhance economic growth if properly harnessed.