Investigating the Nexus between Financial Inclusion and Poverty Reduction in Nigeria (2013-2023)

Abstract

This study investigates the nexus between financial inclusion and poverty
reduction in Nigeria over the period of 2013 to 2023. Financial inclusion,
defined as access to a wide array of formal financial services, is crucial for
economic development and poverty alleviation. The research utilizes a
quantitative approach, analysing data from the World Bank global database
to explore various indicators such as GDP, domestic credit to the private
sector, bank non-performing loans, and poverty headcount ratios. The
findings reveal significant challenges hindering financial inclusion in Nigeria,
including limited access to credit, low financial literacy, and disparities in
banking infrastructure distribution between urban and rural areas. Despite
efforts by the government and financial institutions to promote financial
inclusion, the study identifies persistent gaps in reaching marginalized
populations. Recommendations for policymakers, investors, and market
participants include enhancing financial literacy programs, leveraging
technology for inclusive banking, supporting Microfinance Institutions
(MFIs), and fostering public-private partnerships. By addressing these
challenges and implementing the proposed recommendations, Nigeria can
create a more inclusive financial ecosystem, empower individuals, and
accelerate poverty reduction efforts. However, the study acknowledges some
limitations, such as reliance on available data and the need for longitudinal
studies to assess the long-term impact of financial inclusion initiatives. Future
research should explore cultural and societal dynamics influencing financial
inclusion and conduct comparative studies across different regions and
demographic groups to develop more targeted interventions. Overall, this
study underscores the importance of advancing financial inclusion as a
catalyst for sustainable development and poverty reduction in Nigeria.