FINANCIAL INCLUSION: A PANACEA FOR ACHIEVING SUSTAINABLE DEVELOPMENT IN NIGERIA

Abstract

This study evaluated the effect of financial inclusion on sustainable development in Nigeria. Both Error Correction Model (ECM) and Fully Modified Ordinary Least Square (FMOLS) were used to ascertain the short-run and long-run relationship respectively among the variables spanning the period from 2001 to 2022. The results of the analysis indicated that in the short-run there is causality running from a number of commercial bank branches, demand deposit from the rural areas, and loan to rural areas to IHDI. The long-run result revealed that the explanatory variables: loan to rural areas, number of commercial bank branches and demand deposit from the rural areas all have positive significant effect on IHDI in Nigeria. The overall result has shown that financial inclusion has effect on sustainable development in Nigeria. The study recommended that banks and monetary authorities should develop new product and services that will attract savings from the rural dwellers because of the level of significance of their deposit to the development of the country. Besides, commercial banks should ensure that the rural dwellers are provided with more bank branches, most especially, in areas where there are few or no banks. Credit facilities should also be provided to the people at an affordable rate as this will uplift the level of inclusion and reduce the level of exclusion in the country which will improve sustainable development in the country.