Effect of Financial Inclusion on Economic Growth in Nigeria

This study investigates the effect of financial inclusion on economic growth in Nigeria from 1992 to 2023. Autoregressive Distributed Lag (ARDL) Model technique was used for the estimation of the parameters. After estimation of the long run model and error correction model using ARDL, the study found that financial inclusion has a significant positive effect on economic growth in Nigeria in the short run. Also, in the long run, financial inclusion significantly affects the growth of the Nigerian economy. However, this relationship is negative. Hence, it can be concluded that, to improve the growth of the Nigerian economy in the short run, the Nigerian government must lay emphasis on improving financial inclusion across the nation state in the short run. But to ensure increasing growth levels in the long run, the government must branch into other segments of the economy as financial inclusion alone cannot sustain increasing growth levels overtime. Therefore, the study recommends that the Central Bank of Nigeria (CBN) should strengthen credit support programs for SMEs and rural borrowers through the promotion of regulatory and policy support for digital banking adoption.