Financial Inclusion and Investment in Nigeria

Abstract

This study examines the relationship between financial inclusion and investment in Nigeria. Many studies have focused on examining the relationship between financial inclusion andeconomic growth, however, economic growth cannot be achieved without sustainable investment guaranteed by financial inclusion. This study thus seeks to bridge this gap and fill the lacuna. Annual time series data was obtained from the CBN statistical bulletin and for the period 1981-2015. The study makes use of the autoregressive distributed lag (ARDL) bound co-integration testand error correction model. The outcomes of the study show that not all the three criteria for financial inclusion (availability, accessibility and affordability) guarantee investment in the Nigerian economy. This study recommends that private individuals should have uncomplicated access to credit and fair distribution of commercial banks in the rural setting of the state.

Keywords

• financial inclusion
• investment
• gross capital formation
• autoregressive distributed lag model