Financial Inclusion As A Driver Of Economic Development In Nigeria

• Mohammed A.M Usman

  Adamawa State University, Mubi, Faculty of Social Sciences, Communication and Media Studies, Department of Economics Adamawa State-Nigeria

  Author

• Hamisu Ali

  Adamawa State University, Mubi, Faculty of Social Sciences, Communication and Media Studies, Department of Economics Adamawa State-Nigeria

  Author

• Babangida AdamU

  Adamawa State University, Mubi, Faculty of Social Sciences, Communication and Media Studies, Department of Economics Adamawa State-Nigeria

  Author

• Hannatu Abuna Melle

  Adamawa State University, Mubi, Faculty of Social Sciences, Communication and Media Studies, Department of Economics Adamawa State-Nigeria

  Author

• Scholastica John Itodo

  Adamawa State University, Mubi, Faculty of Social Sciences, Communication and Media Studies, Department of Economics Adamawa State-Nigeria

  Author

This study investigates the role of financial inclusion as a driver of economic development in Nigeria, employing a quantitative explanatory research design and the Autoregressive Distributed Lag (ARDL) approach over the period 1990–2024. The study is anchored on the Financial Intermediation Theory by Gurley and Shaw (1960). Economic development is proxied by the Human Development Index (HDI), while financial inclusion is measured using a composite index of access, usage, and digital financial services, sourced from the World Bank Global Findex Database. Inflation, education, and infrastructure are included as control variables to capture macroeconomic stability, human capital, and physical infrastructure. Unit root tests show that the variables are integrated of mixed orders, justifying the use of the ARDL bounds testing method, which confirms a stable long-run relationship among the variables. Short-run estimates reveal that financial inclusion, education, and infrastructure do not have immediate significant effects due to adjustment lags and institutional rigidities; however, the error correction mechanism shows that about 78 percent of short-run disequilibrium is corrected annually, with the coefficient being negative and significant at the 1 percent level. Long-run results indicate that financial inclusion is a significant and positive determinant of economic development, while education and infrastructure have positive but weak effects, and inflation is insignificant. The study concludes that enhancing financial inclusion is critical for sustainable economic development in Nigeria. It recommends that the government prioritize policies that expand access to formal and digital financial services, supported by financial literacy programs and strong institutional frameworks, to maximize long-term developmental impacts. 

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