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Rivers State University, Port Harcourt.
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| Title: | Determinants of Financial Inclusion in Nigeria |
| Author(s): | ISUKUL Araniyar & MEKOMA Christopher Nna |
| Abstract: | This study adopts an ex post facto research design in analyzing the determinants of financial inclusion in Nigeria between 2007 and 2019. The specific objectives are to determine how deposit interest rate, literacy level and GDP per capita affect the number of depositors with commercial banks used the proxy for financial inclusion. Econometrics techniques such as unit root test, cointegration and Dynamic Least Squares (DOLS) were utilized for data analysis. The unit root test results revealed that all the variables are integrated of order one. This implies that they are difference stationary. There is also evidence of cointegration among the variables in the model which implies that the number of depositors with commercial banks has long run equilibrium relationship with deposit interest rate, GDP per capita and literary level. The estimated cointegrating regression equation reveals that deposit interest rate and literacy level positively affect financial the number of depositors with commercial banks. This finding is impressive as it indicates that monetary policy initiative and social factor in the form of improved literacy play important role in the process of financial inclusion. On the contrary, GDP per capita has adverse effect on financial inclusion indicator. This suggests that contrary to a priori expectation, increase in income does not translate into financial inclusion. On the basis of the findings, this study recommends that the monetary authorities, especially the CBN should ensure that deposit interest rate is maintained at level capable of providing incentive for surplus spenders to save in banks. |
| Keywords: | Financial inclusion, deposit interest rate, literacy level, per capita GDP and depositors |
| Journal: | Economic and Social Science Review (ESR) |
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