The Drivers of Financial Inclusion in Nigeria

Abstract

Financial inclusion has been closely linked to economic growth. This study identifies income, education, age, gender, urban-rural classification and access, as key drivers of financial inclusion and analyses their impact onthe likelihood of being banked in Nigeria. The study uses a survey of over 20,000 respondents in 37 states in Nigeria from 2008 to 2016. The results show that the average income and education levels in Nigeria significantly determine the likelihood of having an account with a bank or any other formal financial service provider. Being a woman, a youth and living in a rural area, however, have significant negative effects on financial inclusion. Lastly the lower the average travel time to the nearest branch of a bank, the more likely an individual will be financially included in Nigeria.The findings will inform policy interventions in areas such as financial literacy and poverty alleviation. The interventions can be targeted to the relatively financially excluded groups as revealed in the study: the youth, the women and the rural dwellers