EFFECT OF FINANCIAL INCLUSION ON FINANCIAL DEEPENING IN NIGERIA
Tanko, Yahaya , M. Ibrahim, PhD and Salihu Liman Mairafi, PhD
Volume 4 Issue 2
Abstract
The study investigates the effect of financial inclusion on financial deepening in Nigeria. The study adopted an Ex post facto research design and used quarterly time series secondary data covering the period 2014 to 2023. The regression model was employed as the regression model to analyze the data obtained from the Statistical Bulletin of the Central Bank of Nigeria. The findings of this study revealed that both rural commercial banks’ branches and commercial banks’ loans to small and medium enterprises (SMEs) have positive but insignificant effect on financial deepening in Nigeria. The study therefore concludes that financial inclusion influences financial deepening in Nigeria. The study recommends among other that, policymakers and financial institutions should foster the expansion of rural commercial bank branches, especially in underserved and remote areas, through targeted policies and subsidies. The study also recommends that policymakers and financial institutions should establish credit guarantee schemes and other risk-sharing mechanisms to incentivize commercial banks to increase their lending to SMEs, which are often perceived as high-risk borrowers. Key words: Commercial Banks’ Branches, Commercial Banks’ Loans, Financial Deepening, Financial Inclusion, SMEs.
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