Financial Inclusion: A Panacea for National Development in Nigeria

Abstract

Development is a key factor in every society, although, the understanding of the concept differs from society to society. That is, each society has ways of developing itself passing through the necessary developmental stages. The success of these stages is a function of many key policies, programmes, and initiatives. The study employed the Autoregressive Distributed Lag (ARDL) bounds testing technique to empirically examine the effect of financial inclusion on national development in Nigeria from 1980 to 2018. The empirical result indicates the existence of Co-integration (long-run) relationship between national development (proxy by Human Development Index-HDI) and financial inclusion (measured by access to financial institutions, access to ATM facilities, access to credit, and the credit to the private sector). In addition, the result demonstrates the presence of statistically significant positive impact of access a bank, ATM facilities, and credit on national development, as well as the existence of significant negative impact of credit to the prive sector on national development in the long run. Equally, in the short run, it was discovered that, while access to the bank in the current and previous year, and the access to ATM facilities in the past year impact on national development positively. In essence, while these entails the tendency of improved level of financial inclusion enhancing national development, policy makers are therefore recommended to put in place strategies which will further enhance the level of financial inclusion in the country