The Effect of Financial Inclusion on Nigeria Economy
Oti Passion, Emmanuella Obiajulu Chiadika and Callistar Kidochukwu Obi*
Department of Economics, Delta State University, Abraka, Nigeria
Callistar Kidochukwu Obi
Abstract: Most adult citizens of Nigeria do not have access to financial services since they are unbanked. This has implication on the economy. Financial Inclusion Strategy was introduced to ensure the inclusion of these unbanked adults. The study therefore investigated the effect of financial inclusion on Nigeria economy, adopting OLS techniques in estimating the time series data having subjected the data to ADF unit root test. From the analysis, it was evident that number of ATM/100,000 adults contributes positively and significantly to the Nigeria economy. This means that ATM usage by banks as a means of payment drives growth in the short run. POS/100,000 adult is not significant, and does not contribute to the economy. This can be attributed to the fact that POS was recently introduced into the banking system as a means of payment and is yet to make any significant impact on RGDP. This is further affirmed from the analysis which showed that a 10 percent rise in the number of POS/100,000 adults does not increase RGDP by any percentage. It therefore means that POS impact is likely to be felt in the long run and not in the short run. It was therefore recommended among others that government at all level should create a public awareness on the need for individuals not only to be banked especially in the rural communities but to avail themselves with the opportunities of using the ATM and POS as a means of banking services as this will help drive growth.
Keywords: Automated Teller Machine, Financial Institutions, Financial system, Nigeria Economy, Point of Sale, Rural dwellers.