IMPACT OF FINANCIAL USAGE COMPONENT OF FINANCIAL INCLUSION ON INCLUSIVE ECONOMIC GROWTH IN NIGERIA: DISAGGREGATED APPROACH
Keywords:
Financial inclusion, FMOLS, Inclusive growth, Rural deposits, Rural loansAbstract
The paper examined the impact of the financial usage component (rural loans and rural deposits) in inclusive growth in Nigeria using quarterly time series data from 2010Q1 – 2022Q4. The study relied on secondary data for our analysis which were sourced from the Central Bank of Nigeria (CBN) statistical bulletin and National Bureau of Statistics. The study used Gross Domestic Product per Capita (GDPC), Loans/credit to rural dwellers (RLOAN), Rural Deposit (RDEP) and Broad money supply (M2). The Augmented Dicky Fuller (ADF) stationarity test, Johanson cointegration technique and the Fully Modified Ordinary Least Squares (FMOLS) for the estimation were employed. The result reveals that there is a long-run relationship among the variables. The results further show that all the financial usage component variables of financial inclusion (RLOAN and RDEP) are significant in explaining the variations in GDPC. The study
concluded that the financial usage component of financial inclusion (RLOAN and RDEP) has a direct and significant impact on inclusive economic growth in Nigeria. The study therefore recommended among others that financial institutions should improve financial services be made available especially to rural dwellers and the economy as a whole at a reasonable cost and at a reasonably low interest rate to enable them to participate and contribute to national productivity under strict monitoring and evaluation system.