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An Analysis of Financial Inclusion and Economic Growth in Nigeria; An ARDL Approach

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  • Kenechukwu J. Nwisienyi

    (School of Financial Studies, Department of Banking and Finance, Federal Polytechnic Oko Anambra State, Nigeria)

  • Onyeka A. Obi

    (School of Financial Studies, Department of Banking and Finance, Federal Polytechnic Oko Anambra State, Nigeria)

Abstract

The study investigated the relationship between financial inclusion and the Nigerian economic growth using an annual time series data for the periods 2004 to 2018. The Auto Regressive Distributive Lag bounds test for cointegration and Error Correction model was applied to examine the long run relationship of the variables. The result showed that there is cointegration amongst the variables. The Number of ATMs per 100,000 adults was found to be positively and significantly correlated with economic growth while borrowers from commercial banks per 1000 adults and lending interest rates were significantly negative to economic growth. The study found depositors with banks per 1000 adults to be insignificant. The study recommends, amongst other things, that effective campaign or awareness should be made to increase financial literacy and/or awareness. Again, transaction costs and financial obligations attached to using financial services or products should be reviewed downwards to accommodate the proportion of the population that is poor.

Suggested Citation

  • Kenechukwu J. Nwisienyi & Onyeka A. Obi, 2020. "An Analysis of Financial Inclusion and Economic Growth in Nigeria; An ARDL Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(10), pages 126-134, October.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:10:p:126-134
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    References listed on IDEAS

    as
    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    3. Moïse Bigirimana & Xu Hongyi, 2018. "Research on Relationship between Financial Inclusion and Economic Growth of Rwanda: Evidence from Commercial Banks with ARDL Approach," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 4(1), pages 7-18, April.
    4. Abiola A. Babajide & Folasade B. Adegboye & Alexander E. Omankhanlen, 2015. "Financial Inclusion and Economic Growth in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 629-637.
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