Financial Inclusion and Entrepreneurship Development in Nigeria

Abstract

Financial inclusion is when financial instrument and services are provided and delivered by a range of providers usually the private sector, to reach the entire customer who needs their service. The study investigates financial inclusion and entrepreneurial development in Nigeria. The variables of deposit to rural areas, loan to rural areas, loan to deposit ratio and loan to small scale enterprises were regressed on entrepreneurial development in Nigeria. The study adopted an ex-post facto research design because the data for the study are secondary data which were sourced from Central Bank of Nigeria Statistical Bulletin. The study employed Econometric techniques, such as Augmented Dickey Fuller Test for Unit Root, Engel Granger Cointegration and Vector Autoregression Estimates were used. Our findings showed that deposit to rural areas, loan to rural areas, loan to deposit ratio and loan to small scale enterprises had positively and significantly affected entrepreneurial development in Nigeria. Again, Adjusted R-squared of 71% implies that 71% of total variation on entrepreneurial development can be explained by the explanatory variables while the remaining 29% is due to other stochastic variables. We therefore submits that financial inclusion have positive effect on entrepreneurial development and has helped to improve standards of living in Nigeria. Amongst the recommendations is that deposit money banks should give due emphasis to its savings mobilization and strive to increase their deposit interest rates in order to mobilize deposits from rural areas and should provide excellent services for their customers.