Vol 9, No 4 (2021)
Does Financial Inclusion Alleviate Poverty in Nigeria? A Time Series Analysis
Akeeb Olushola Oladele, Alwell Nteegah, Okechuku Onuchuku, Monday Olulu Robinson
Abstract
The quest to reduce poverty by the government and its agencies through the provision of financial services for the poor and rural dwellers in Nigeria makes it imperative to investigate how the access, availability and cost of financial services provided by Deposit money banks (DMBs) have reduced poverty in Nigeria. In order to achieve this purpose of the study, data on poverty rate as dependent variable, deposit penetration, credit penetration, bank branch penetration, ratio of domestic investment to GDP and interest rate as independent variables were sourced from secondary source and analysed using the Autoregressive and Distributed lag (ARDL) methodology. The result shows that: deposit penetration and bank branch penetration had negative and significant impact on poverty level both in the short and long run hence retarded poverty while credit penetration has mix effect on poverty in the short run but positive and significant impact on poverty in the long run. Ratio of domestic investment to GDP also exerted negative impact on poverty in the long run while interest rate has insignificant and negative impact on poverty in the short run but positive and insignificant effect on poverty in the long run. The result also shows that the variables in the poverty equation adjust speedily to short run dynamics in poverty level. Given these results, the study concludes that, financial inclusion (access, availability and cost of financial services) significant implications on poverty level both in short and long run in Nigeria over the period of this study. Based on this conclusion, the study recommends: increase in deposit mobilisation through savings, domestic investment and banks’ branches to create jobs and reduce poverty in Nigeria.
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Keywords
Poverty rate, Deposit penetration, Credit penetration, Branch penetration, Domestic investment, Interest rate.
Publication information
Volume 9, Issue 4
Year of Publication: 2021
ISSN: 1857 - 8721
Publisher: EDNOTERA
How to cite
Oladele A.O., Nteegah A., Onuchuku O., Robinson M.O.: Does Financial Inclusion Alleviate Poverty in Nigeria? A Time Series Analysis. Journal of Applied Economics and Business, Vol 9, No. 4, 89-108. (2021)