A Multi-Sectoral Study of Financial Inclusion and Economic Output in Nigeria

• Main Authors: Olaniyi Evans, Olaniyi Lawanson
• Format: Article
• Language: English
• Published: Ovidius University Press 2017-01-01
• Series: Ovidius University Annals: Economic Sciences Series
• Subjects: Financial inclusion; output; sectoral output; causality
• Online Access: http://stec.univ-ovidius.ro/html/anale/ENG/2017/Section-III/14.pdf

This study evaluates the causal links between financial inclusion and economic output, as well asbetween financial inclusion and the five sectors of the Nigerian economy using cointegration andGranger causality test. The results suggest that there is bi-directional causality between financialinclusion and the aggregate economy. In most cases, there is bi-directional causality betweenfinancial inclusion and the sectors of the economy as well. This study also shows that financial usagehas higher causal links with the economy and its sectors than financial access. Thus, a responsiblepursuit of financial inclusion in Nigeria will emphasize not only creation of access to finance, but mostimportantly, its usage. This study establishes financial inclusion as a potent accelerator of economicprogress, which can help realize the national objectives of building shared prosperity and abolishingextreme poverty. For policymakers, the message is clear: Mainstream rural credit from banks andother financial intermediaries in such a way as to realize increased coverage, broaden financialinclusion and stimulate output.