Access to and use of financial services for household investment: a micro-analytical evidence from Nigeria

The study respectively examined the impact of access to and use of financial services on household investment. A micro-level data across cross-sectional 2,184 households in southwestern Nigeria were used to evaluate the relationship between investment and access to and use of financial services. Analysis of data by double hurdle and probit model respectively showed that household investment pattern conformed with the life-cycle hypothesis, and that household investment are associated with formal, semi-formal and informal financial services. Household who use (saved and/or borrowed) financial services invested more than those having mere access to such financial institutions. Results further showed that households that saved or/and borrowed from formal financial institutions are better investors, and that investment are majorly constrained by supply-side barriers. Policy effort at reducing barriers to access and use of financial services should include strategy at resolving demand-side barriers as this would improve financial stability of household to use financial services and substantially enhance household investment.