Nigeria Financial System and Financial Inclusion

This study assesses the impact of Nigeria’s Financial System on financial inclusion in the country. The ex-post facto research design was judged to be appropriate to use. This study utilizes time series data spanning from 2012 to 2023. Given the nature of the research and the suitability of the available data, secondary data sources were employed. The dependent variable of the study was financial inclusion proxied by number of mobile money transactions (MMT) while the independent variable was Nigeria’s Financial System proxied by Interest rate (INT) and Inflation (INF). The data were obtained from the official databases of both national and international agencies, including the Central Bank of Nigeria (CBN), Nigeria Inter-Bank Settlement System (NIBSS), and the International Monetary Fund (IMF). Using the Autoregressive Distributed Lag (ARDL) methodology, this study estimates and interprets the parameters of each variable, providing insights to answer the research questions. The result indicates that inflation has a positive and significant effect on mobile money transactions in Nigeria while interest rates show no significant impact on mobile money usage. The study recommends that government and financial institutions should improve digital payment systems and enhance financial inclusion while leveraging mobile money transactional strengths during inflation.