Effect of Financial Inclusion on Economic Development in Nigeria
Abstract
This study investigated the effect of financial inclusion on economic development in Nigeria. Financial inclusion has become a critical issue in Nigeria, as a significant portion of the population is excluded from accessing financial services. This exclusion prevents individuals and small businesses from participating fully in the economy, hindering economic growth and economic development. This study specifically examined the effect of credit to private sector, number of commercial bank branches, and money supply on human development index in Nigeria. Secondary data were collected from the World Bank and Central Bank Nigeria (CBN) from 2005 to 2023. The study employed the Ordinary Least Square (OLS) technique. The findings revealed that credit to private sector; numbers of commercial bank branches and money supply have insignificant effect on the human development index of Nigeria. Based on these findings, it is recommended that implementing policies that enhance the effectiveness of credit in improving social outcomes, ensuring better allocation and usage of funds in human development sectors. This study contributes to existing literature by highlighting that financial institution impact on the human development index of Nigeria depends on the instruments or combination used providing insights into policy design.
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