The effect of remittance inflow on savings in Nigeria: The role of financial inclusion

Abstract

While recent literature has pointed to a positive effect of remittance inflow on the financial development of receiving countries, findings on its effect on the saving patterns of recipients have received little attention. This study examines the effect of remittance inflows on savings and the moderating role of financial inclusion in Nigeria. In analyzing the data, a binary logit model was employed. Using World Bank survey data on 3000 Nigerians, we found that individuals with a bank account either on their mobile or with a financial institution (FI) are more likely to save compared to individuals without any account. This likelihood of saving doubles if individuals have both mobile and FI accounts. In addition, individuals who have received remittances are more likely to save than those who have not received any remittances. Lastly, we find that having a bank account and receiving remittances combine to make individuals more likely to save. Government policies should focus on leveraging remittance inflows by improving financial inclusion to facilitate savings and investment in Nigeria.

Keywords

• Remittances
• savings
• financial inclusion
• financial products
• Nigeria
• F22