Nigeria witnessed an unprecedented wave of mergers and acquisitions in its banking sector in the post1995 and 2009 periods as a result of regulatory mandates issued by the central bank of nigeria, aimed at strengthening the capital base of nigerian banks. Regulatory impact on mobile money and financial inclusion. Business combination through mergers and acquisitions has become a global phenomenon to achieve economies of scale and higher productivity. Mobile drives financial inclusion in africa, growing 20%.
Universally, all inclusive financial system indeed promotes economic growth. As defined by sarma 2008, financial inclusion is the process that ensures the ease of access, availability, and usage of the formal financial system for all members of an economy. Pdf financial inclusion has been closely linked to economic growth. Although gradual progress is being made to improve on financial inclusion, critical challenges of low financial literacy, inadequate infrastructural facilities as well as inadequate and inefficient technologybased facilities by financial institutions, has limited the achievement of significant expansion in financial inclusion level in nigeria. Financial inclusion in africa african development bank. Nigeria s financial inclusion landscape includes both great hope and great challenges. On the supply side, formal financial services are accessed through traditional. Testing the impact of financial inclusion on income. This publication on financial inclusion in africa is produced by the staff of the african development bank. The study found out that there is a significant relationship between financial inclusion and financial well being of the low income earners. Search and screen birds of the same feather, they say, flock together.
Bill gates canvasses support for advancing financial inclusion in nigeria. In july 2018, the cbn released an exposure draft of the national financial inclusion strategy refresh. It is on the basis of this motivation that the study is primarily design to investigate the influence of financial inclusion on the growth of african economy, using nigeria as a case study. Effects of financial inclusion on the economic growth of nigeria 19822012 onaolapo a. The dependent variable of financial inclusion proxied by contribution of financial institutions to gross domestic product gdp was regressed on the explanatory variable of. The central bank of nigeria and other stakeholders intend to implement a national financial inclusion strategy to decrease the number of nigerians that are excluded from financial services from 46. Archival data sourced from central bank of nigeria statistical bulletin was used for the estimation of the variables. Furthermore the inclusion of the control would enhance a better. Theoretical literature of financial inclusion on economic growth. Effects of cashless economy policy on financial inclusion. In a bid to drive financial inclusion rate upward, the central bank of nigeria cbn, on 23rd october, 2012 in collaboration with other stakeholders launched the national financial inclusion strategy nfis with a view to ensuring that over 80% of the bankable adults in nigeria have access to financial services by the year 2020.
D department of management and accounting, faculty of management sciences ladoke akintola university of technology, ogbomoso, nigeria. The peruvian case giovanna priale reyes, sbs peru, luis daniel allain canote, sbs peru, and rafe mazer, cgap i. Second, it uses the global financial inclusion indicators global findex database to characterize adults in africa that use formal and informal financial services and identify the barriers to formal account ownership. This paper examines the effects of financial inclusion on the economic growth of nigeria 19822012. Moving nigeria towards greater financial inclusion a recent study by the imf, which examined data from uganda, kenya, mozambique, malaysia, philippines and egypt, demonstrated that by leveraging three aspects of financial inclusion, a country can positively impact economic growth and affect income distribution. It further examines different regulations that have influenced the development of financial inclusion through the use of the mobile financial services in the 4 countries. The role of financial inclusion on economic growth. The central bank of nigeria cbn adopted the national financial inclusion strategy nfis in 2012. Specifically, it means a financial system that serves as many people as possible in a country. Assessing financial inclusion advances in subsaharan africa.
Financial inclusion outlook naonal financial inclusion strategy financial inclusion iniavesby stakeholders 1 iden. Financial technology, data, and expertise refinitiv. Designations employed in this publication do not imply the expression of any opinion, on. Nigeria alliance for financial inclusion bringing smart.
Regulatory impact on mobile money and financial inclusion in. O1 ayanwale 2s and nwankwo e 1department of economics, accounting and finance, college of management sciences, bells university of technology, ota, nigeria. Nigerias financial inclusion landscape presents both opportunities and challenges. With the increasing number of microfinance banks in nigeria and the mounting drive for inclusive financial systems, therefore, it would be worthwhile to assess the impact of microfinance on financial inclusion in the country. As africas largest economy, nigeria has the potential to drive consumers toward financial inclusion, yet internal strife and economic instability have made progress uncertain. How to promote financial inclusion in nigeria world. In a circular, central bank of nigeria cbn lamented that we are not meeting any of the financial inclusion targets agreed and contained in the 2012 financial inclusion strategy. Regulating fintech in nigeria and financial inclusion. Umoren and olokoyo 2007 studied merger and acquisition in nigeria.
Issues and challenges abstract financial inclusion is a state where financial services are delivered by a range of providers, mostly the private sector, to reach everyone who could use them. Journal of internet banking and commerce, may 2017, vol. National financial inclusion strategy microfinance gateway. The little data book on financial inclusion 2018 data. Babajide et al financial inclusion and economic growth in nigeria international journal of economics and financial issues vol 5 issue 3 2015 631 is the provision of a low cost reliable means of payment to. Insufficient funds explores how institutional constraints and individual decisions combine to produce this. Financial inclusion assures easy access to financial services by enabling the disadvantaged and vulnerable sections of the society to actively contribute to development and protect themselves against socioeconomic shocks. Financial inclusion is achieved when adults have easy access to a broad range of formal. The central bank of nigeria cbn has launched financial inclusion strategy in october 2012.
The second is the role financial intermediation plays in increasing the volume of. The study examined the effects of financial inclusion on economic growth in nigeria from 2000 to 2018. Nigeria financial inclusion report 2017 slideshare. The little data book on financial inclusion 2018 is a pocket edition of the global findex database published in 2018. Refinitiv provides financial software and risk solutions delivering news, information and analytics, enabling transactions, and connecting the global community. Mar 29, 2017 the purpose of nigerias national financial inclusion strategy fis is to set a clear agenda for significantly increasing access to and usage of financial services by 2020. Sandboxes, open banking, and the impact on financial inclusion in nigeria emmanuel paul february, 2020 diverse moves to deepen financial inclusion has been on the rise in recent years with the enactment and development of different financial regulations, solutions, and products from key parties such as the central bank of nigeria cbn. The first national financial inclusion strategy nfis was launched in 2012 and between then and now, financial exclusion has only reduced by 2. However, the income convergence effect of financial inclusion remains only partially explored. The national financial inclusion strategy which was launched on october 23, 2012 specified that a financial inclusion secretariat shall be established in the central bank of nigeria to coordinate the activities of stakeholders towards implementation, and to gather and analyze data. Dudin financial inclusion as a strategy for enhanced economic growth and development lawrence uchenna okoye department of banking and finance, covenant university, ota, ogun state, nigeria. Apr 22, 2014 the economy of financial inclusion in nigeria. Analysis of performance pre and post consolidation of thirteen mega banks in order to consider if there had been improvements. Such indices can combine variables from supply and demandside.
If you wish to download, we have provided the download link at the. Nigeria confronts a challenging financial inclusion gender gap efina data provide a similar picture of gender differences, albeit with a smaller gender gap in 2014 than the gap revealed by the findex data. Nigeria financial inclusion insights survey technical. Sep 30, 2016 financial inclusion is a broad concept. Both retail banks and fintechs in nigeria are using digital innovation in banking to solve issues in an exciting and modern way. The lack of access to the formal financial system financial exclusion can be voluntary or involuntary. Challenges to the success of financial inclusion in nigeria there are several challenges identified that have created the gap and pose as unsurmountable mountain to financial inclusion in nigeria. Lessons from latin america and caribbean maria luisa hayem, andrea reyes, ana maria torres.
There must be a consensusadidem and compatibility of objectives between the merging firms. Will the introduction of psbs improve financial inclusion. Jan 26, 2017 nigeria financial inclusion report 2017 1. Potential impact of financial inclusion on economic growth in. Assessing the effect of policy on financial inclusion in nigeria. This dissertation attempts to provide a snap shot of the extent of financial inclusion i. Women entrepreneurs and financial inclusion in nigeria. Financial inclusion as the provision of a broad range of high quality financial. Pdf financial inclusion and nigerian economy 1990 2015. Banks consolidation in nigeria covenant university. Sandboxes, open banking, and the impact on financial. Financial inclusion, as a key pillar for inclusive development, has long been considered as an important instrument for reducing poverty and income inequality. The transformative role of technology issa faye and thouraya triki dfis support to financial inclusion in africa isabella massa the tradeoff between financial inclusion and financial stability pietro calice financial inclusion.
However, while we may not have seen the needle move significantly in financial access. This financial inclusion insights fii survey is the fifth in a series of surveys intermedia uses to track the role dfs play in. Efina enhancing financial innovation and access we are a financial sector development organization that promotes financial inclusion in nigeria. Effectiveness of financial inclusion strategy in nigeria stephen arogordon baze university abuja faculty of management and social sciences department of accounting, banking and finance stephen. It highlights differences among the 4 countries and their financial regulatory environment. Effects of financial inclusion on economic growth in. Pdf effects of financial inclusion on economic growth in. April 15, 2019, washington, dc representatives of finca microfinance bank limited in nigeria finca nigeria and of the nigerian government held talks to advance financial inclusion and economic development in the country.
Analysis of the determinants of financial inclusion in. In the document, one of the identified reasons why nigeria failed to meet its 2012 financial inclusion strategy was the lack of an appropriately regulated. The study and survey of financial inclusion is useful for both policy makers and bank service providers to make strategic decisions. Effectiveness of financial inclusion strategy in nigeria. The strategy articulated the demandside, supplyside and regulatory barriers to. Sep, 2016 for example, the central bank of nigeria is a signatory to the maya declaration on financial inclusion and launched the national financial inclusion strategy in collaboration with a variety of. Data for the study are collected mainly from secondary sources such as statistical bulletins of the central bank of nigeria c. Not only are we not meeting the targets, we are even retrogressing. In 2010, 36 4% of adults roughly 31 million out of an adult po pulation of 85 million were served by formal financial services. How to promote financial inclusion in nigeria punch. The study examined the effects of financial inclusion on economic growth in nigeria from 2000 to. Six in ten nigerians 60% live below the poverty line, with research showing. Microfinance and the challenge of financial inclusion for sme.
National financial inclusion strategy financial inclusion. The document below titled as national financial inclusion strategy is provided as reference for our readers who wish to read this document on our website without having to download. Generally, there is a believe that once it works anywhere else including kenya, it can work in nigeria. An example is the merger of the nigerian agricultural and cooperative bank nacb, peoples bank of nigeria and family economic advancement program feap, to form nigerian agricultural cooperative and rural development bank nacrdb in 2001. Access bank and diamond bank detail proposed merger to create. In a theoretical perspective, it has been argued that, financial inclusion is a drive forces toward economic growth. Merger will form a leading tier 1 nigerian bank and the largest bank in. The data represent a third round of data collection since the global findex database was launched in 2011. Women entrepreneurs and financial inclusion in nigeria njideka harry 10 december, 2015 the first and only financial inclusion 2020 global forum was held in london in october 20, where leaders from the public and private sectorsincluding representatives from banks, microfinance institutions, ngos, and mobile network operatorswere. Download the little data book on financial inclusion.
Pdf this paper examined the effects of financial inclusion on the nigerian economy 19902015. This publication on financial inclusion in africa is produced by the staff of the african development bank, and the views expressed therein do not necessarily re. The financial inclusion secretariat offices and their functions. Effects of cashless economy policy on financial inclusion in. Inclusive financial arrangement is becoming a policy issue in both developed. Financial inclusion fi in nigeria is growing but still lags far behind the principal target set in the national financial inclusion strategy, 2012 of the central bank of nigeria. Investment is one of the channels through which financial inclusion pass through to impact economic growth. Some merger actions are specified by law or by a regulatory body as was the case of recent bank consolidations in nigeria. The importance of access to finance cannot be understated. This was to generally assess the expansion of financial inclusion of nigerian from. Original research article impacts of mergers and acquisition. Abstract using data from the global financial inclusion database global findex of the world bank, this study attempts to identify and analyse the determinants of financial inclusion in central and west africa, two of the least financial inclusive regions of the africa continent. The many challenges of financial inclusion in nigeria. In other words, the study examines how cashless policy based on some selected factors lead to financial inclusion in nigeria.
This paper summarizes financial inclusion across africa. In 2012, nigeria introduced the national financial inclusion strategy nfis and promoted it as a key driver in becoming one of the worlds largest economies the goal of nfis is to decrease the number of nigerians without access to financial services from 46. Intermedia conducted a nationally representative survey in nigeria to explore the uptake and usage of digital financial services dfs among the adult population ages 15 and over. Babajide et al financial inclusion and economic growth in nigeria international journal of economics and financial issues vol 5 issue 3 2015 631 is the provision of a low cost reliable means of payment to all, particularly the low income group. It will cover some selected commercial banks in nigeria, which have engaged in one form of corporate restructuring exercise or the other and. Six in ten nigerians 60% live below the poverty line, with research showing that being poor, rural and less educated are all barriers to inclusion. Financial inclusion and the role of women in nigeria. Introduction the importance of sound and effective social inclusion policies has been widely accepted for more than a century. Financial inclusion and the role of women in nigeria toyin segun ogunleye i am grateful to professor john weiss and dr hossein jalilian, university of bradford, uk, and mr adebusuyi banji and dr adebiyi michael for their useful and valuable suggestions. Moreover, sarma 2008 noted that financial inclusion should. Financial inclusion conundrum central bank of lesotho.
Does financial inclusion reduce poverty and income inequality. D, hcib department of accountingfinance, faculty of management and social sciences, godfrey okoye university, enugu. The role of data in supporting financial inclusion policy bis. Financial inclusion becomes a major phenomenon for policy maker across the world for planning a strong policy in achieving the sustainable growth. Financial inclusion indicators for developing countries. In 2012, nigeria introduced the national financial inclusion strategy and promoted it as a key driver in becoming one of the worlds largest economies. Pdf the drivers of financial inclusion in nigeria researchgate. Financial inclusion as an effective policy tool of poverty. Diamond bank plc has confirmed a merger and acquisition process with nigeria s tier1 bank, access bank plc. Extrapolated time series financial inclusion data from nigeria, covering the period of 1981 to 20 were used in the analysis. Project muse the impact of microfinance on financial. First, it provides a brief overview of the african financial sector landscape. Based on the foregoing issues at hand, the main aim of this study is to conduct an appraisal of the effects of cashless economy policy on financial inclusion in nigeria. Financial inclusion newsletter march 2018, volume 3, issue 1.
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