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Impact assessment of the financial inclusion strategy in Nigeria: Lessons from BRICS and other countries

Olawale Isaac Wale-Awe (), Alabi Kehinde Miracle and Omoloye Najeem Adekunle
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Olawale Isaac Wale-Awe: Executive Director at Strides Educational Foundation
Alabi Kehinde Miracle: Department of Finance, Ekiti State University, Nigeria
Omoloye Najeem Adekunle: Department of Finance, Ekiti State University, Nigeria

BizEcons Quarterly, 2020, vol. 13, 3-22

Abstract: The quest for economic development through an all-inclusive financial system has evolved to be the recent focus in financial literature and practice especially in developing countries where many are unbanked. This study assessed the financial inclusion strategy in Nigeria and its contribution to economic development between 1986 and 2018. The study regressed loans from rural bank branches, deposits to rural bank branches, number of bank branches and interest rates against per capita income using the ARDL and the Pairwise Causality Techniques. It was revealed that financial inclusion has a significant positive effect on economic development in Nigeria. Meanwhile, a unidirectional causality was found to run from economic development to financial inclusion majorly through the loans from the channel of rural bank branches. A comparative analysis revealed that Nigeria still trails behind the BRICS and some other African countries in the quest to achieve an all-inclusive economic development. It was recommended that for financial inclusion to birth real development, interest rate on loans should be reduced to single digits while deposits emanating from rural areas should be granted as loan credits to people in the same environment and not expatriated for developmental purposes in the urban areas.

Keywords: Economic development; Financial Inclusion; Rural Loans; Rural Deposits Fintech (search for similar items in EconPapers)
JEL-codes: E58 G20 O40 O57 (search for similar items in EconPapers)
Date: 2020
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