The Financial Literacy and Financial Inclusion Linkage: Evidence from Niger State of Nigeria

This study explores the effect of financial literacy on financial inclusion in 12 local government areas in Niger State of Nigeria using the Probit regression model. The estimation results indicate that higher levels of financial literacy positively and significantly influence financial inclusion in both urban and rural regions. The results also confirm that educational status, employment, informality, social security, poverty, gender, and age are important determinants of financial inclusion. The policy implications of the study include the need for all tiers of government to implement robust financial education strategies to amplify the positive effects of financial literacy on financial inclusion and to mitigate the adverse effects of financial illiteracy. Efforts to achieve higher levels of financial inclusion through improved financial literacy must be complemented by policies which focus on improving job creation opportunities, reducing poverty, promoting gender inclusivity, and fostering an enabling business environment.