Financial Inclusion: Implication on Per Capita Income in Nigeria

This study examines the interplay of deposit money banks (DMBs) activities as a link between financial inclusion and economic growth per capita. To achieve the objective of the study, deposits mobilised in rural and urban areas, and credit disbursed to rural and urban areas, were explored to establish the link for a higher level of inclusion in the hierarchy. This study postulates that financial inclusion occurs at the primary, secondary, and tertiary hierarchical levels. Time series data from the Central Bank of Nigeria (CBN) statistical bulletin and the World Bank Financial Indicator for 33 years (1982 – 2018) were gathered to establish the link. Descriptive analysis, Johansen cointegration, vector error correction mechanism (VECM), and ordinary least squares regression tools were used as the estimation techniques. Findings show that although deposit mobilisation and credit disbursed in rural areas are statistically significant in explaining per capita growth and thereby fulfilling the primary level of inclusion in rural areas contrary to expectations, deposit mobilised and credit disbursed in urban areas are not statistically significant in explaining per capita growth. A long-run relationship of the series was also established. The study, therefore, recommends that secondary access inclusion should be implemented for optimal benefits of per capita growth.