This seminar paper examines the relationship between financial inclusion, bank intermediation, and economic growth in Nigeria. The paper begins with conceptualizing these terms and reviewing relevant theories. It then summarizes previous empirical studies that have investigated the relationships between financial inclusion/intermediation and economic growth. The studies found positive relationships, where financial inclusion and intermediation promoted economic growth. However, the paper notes some controversies in results that require further investigation. The aim of this study is to help address gaps in understanding these relationships in Nigeria by employing a wider range of indicators that capture the multidimensional aspects of financial inclusion and intermediation and their effects on economic growth.
Financial Development and Economic Growth Nexus in Nigeriaiosrjce
The study assessed the impact of financial development on economic growth in Nigeria using time
series data from 1970 to 2012. The Autoregressive Distributed Lag bounds testing approach to cointegration
was utilized for this study. The result from the ARDL model indicate that the variables for this study are
cointegrated while the error correction term appeared significant and confirms that short-run disequilibria are
corrected up to about 50 percent annually. The empirical results reveals that financial development exerts
positive and significant impact on economic growth in the long-run while trade liberalization variables exert
negative impact on economic growth in the long-run indicating non-competitive nature of non-oil domestic
products in the international market. In the short-run, domestic credit is insignificant which indicates a dearth
of investible funds in the economy. There is evidence that financial development policies influence economic
growth in the long-run and not in the short-run. This study among others recommends the urgent need to
implement policies that will strengthen the deposit mobilization and intermediation efforts in the banking system
in other to deepen the financial system. Nigerian trade performance should be improved through economic
diversification and further availability of funds to private sector at competitive interest rate in order to produce
internationally competitive products.
Measuring the Dynamics of Financial Deepening and Economic Growth in Nigeria,...iosrjce
The study examined the relationship between financial deepening and economic growth for the
period 1981 to 2013 using empirical evidence from Nigeria. The Engel-Granger two-step cointegration
procedures and Error Correction Model (ECM) were used as the method of estimation. The analyses of
residuals of the OLS regression showed evidence in favour of cointegration between financial deepening and
economic growth. Similarly, estimates from the error correction model provide evidence to show that financial
deepening indicators and GDP series converge to a long-run equilibrium at a reasonably fast rate. The result
points to the fact that the deepening of the financial system can engineer the Nigerian economy to greater
growth.
Measuring the Dynamics of Financial Deepening and Economic Growth in Nigeria,...iosrjce
The study examined the relationship between financial deepening and economic growth for the
period 1981 to 2013 using empirical evidence from Nigeria. The Engel-Granger two-step cointegration
procedures and Error Correction Model (ECM) were used as the method of estimation. The analyses of
residuals of the OLS regression showed evidence in favour of cointegration between financial deepening and
economic growth. Similarly, estimates from the error correction model provide evidence to show that financial
deepening indicators and GDP series converge to a long-run equilibrium at a reasonably fast rate. The result
points to the fact that the deepening of the financial system can engineer the Nigerian economy to greater
growth.
Using a series of econometric techniques, the study analysed interaction between monetary policy and private sector credit in Ghana. This study made use of monthly dataset spanning January 1999 to December 2019 of credit to the private sector (PSC) and broad money supply (M2). The results reveal that there exists cointegration, a long run stationary relation between monetary policy and private sector credit. This implies, increases in credit should prompt long-term increases in monetary policy. It is not surprising that growth in the private sector might have a stronger effect on monetary policy. The Error Correction Test is statistically significant and that all the variables demonstrate similar adjustment speeds. This implies that in the short run, both money supply and credit are somewhat equally responsive to their last period’s equilibrium error. There is unidirectional causation from private sector credit to monetary policy. It can be said that, there is an interaction between money supply and private sector credit. Thus, credit to private sector holds great potential in promoting economic growth. It can be recommended to the government to increase the credit flow to the private sector because of its strategic importance in creating and generating growth of the economy.
Financial Development and Economic Growth Nexus in Nigeriaiosrjce
The study assessed the impact of financial development on economic growth in Nigeria using time
series data from 1970 to 2012. The Autoregressive Distributed Lag bounds testing approach to cointegration
was utilized for this study. The result from the ARDL model indicate that the variables for this study are
cointegrated while the error correction term appeared significant and confirms that short-run disequilibria are
corrected up to about 50 percent annually. The empirical results reveals that financial development exerts
positive and significant impact on economic growth in the long-run while trade liberalization variables exert
negative impact on economic growth in the long-run indicating non-competitive nature of non-oil domestic
products in the international market. In the short-run, domestic credit is insignificant which indicates a dearth
of investible funds in the economy. There is evidence that financial development policies influence economic
growth in the long-run and not in the short-run. This study among others recommends the urgent need to
implement policies that will strengthen the deposit mobilization and intermediation efforts in the banking system
in other to deepen the financial system. Nigerian trade performance should be improved through economic
diversification and further availability of funds to private sector at competitive interest rate in order to produce
internationally competitive products.
Measuring the Dynamics of Financial Deepening and Economic Growth in Nigeria,...iosrjce
The study examined the relationship between financial deepening and economic growth for the
period 1981 to 2013 using empirical evidence from Nigeria. The Engel-Granger two-step cointegration
procedures and Error Correction Model (ECM) were used as the method of estimation. The analyses of
residuals of the OLS regression showed evidence in favour of cointegration between financial deepening and
economic growth. Similarly, estimates from the error correction model provide evidence to show that financial
deepening indicators and GDP series converge to a long-run equilibrium at a reasonably fast rate. The result
points to the fact that the deepening of the financial system can engineer the Nigerian economy to greater
growth.
Measuring the Dynamics of Financial Deepening and Economic Growth in Nigeria,...iosrjce
The study examined the relationship between financial deepening and economic growth for the
period 1981 to 2013 using empirical evidence from Nigeria. The Engel-Granger two-step cointegration
procedures and Error Correction Model (ECM) were used as the method of estimation. The analyses of
residuals of the OLS regression showed evidence in favour of cointegration between financial deepening and
economic growth. Similarly, estimates from the error correction model provide evidence to show that financial
deepening indicators and GDP series converge to a long-run equilibrium at a reasonably fast rate. The result
points to the fact that the deepening of the financial system can engineer the Nigerian economy to greater
growth.
Using a series of econometric techniques, the study analysed interaction between monetary policy and private sector credit in Ghana. This study made use of monthly dataset spanning January 1999 to December 2019 of credit to the private sector (PSC) and broad money supply (M2). The results reveal that there exists cointegration, a long run stationary relation between monetary policy and private sector credit. This implies, increases in credit should prompt long-term increases in monetary policy. It is not surprising that growth in the private sector might have a stronger effect on monetary policy. The Error Correction Test is statistically significant and that all the variables demonstrate similar adjustment speeds. This implies that in the short run, both money supply and credit are somewhat equally responsive to their last period’s equilibrium error. There is unidirectional causation from private sector credit to monetary policy. It can be said that, there is an interaction between money supply and private sector credit. Thus, credit to private sector holds great potential in promoting economic growth. It can be recommended to the government to increase the credit flow to the private sector because of its strategic importance in creating and generating growth of the economy.
Perceptions of People from Economically Backward Section towards Financial In...iosrjce
Financial Inclusion aims to provide the financial services to the people from economically backward
section of the society. The objective is to assist them in their economic improvement and achieve the sustainable
growth. In this study, an effort has been made to examine the views of the people from economically backward
sectionregarding the important aspects of financial inclusion. Views of 53 respondents are analyzed. ChiSquare,
nonparametric statistical technique, has been used to examine whether the views of the different
categories of the respondents about the important aspects of financial inclusiondiffer. Based on the views of the
respondents we found that bank employees are encouraging people from economically weaker sections to open
their accounts and people also found these accounts useful. Respondents are also of the view that education
level, income level, age and period of association of the account holder with the bank directly affects the quality
of services rendered. To further enhance the utility of the scheme and ensure its success, there is a need to
provide training to bank staff so that the quality of services rendered is not differentiated between different
categories of customers. Further, whereas this study pertains to the views of the economically weaker section,
there is a need to examine the views of bankers also, so that this scheme can be made more useful.
Effective sources and uses of finance is one of the primary activities for the success of a
business, where imprudent financing practices have been identified as a key constraint for the development
of the SME sector. For instance, the empirical evidence suggests that uncertainties of the SMEs due tolack
of skills and knowledgeable workers, economic fluctuations and financingcosts at firm level constitutes to het
ride from proper access to formal financing
Microfinance and the Challenge of Financial Inclusion for Sme’s Development i...IOSRJBM
This paper examined microfinance and the challenge of financial inclusion for SMEs development in Nigeria. The study adopted two separate econometrics models for capturing and testing for significance in the stated objectives between 2005 and 2015. The first model determined whether financial inclusion improve the financial well-being of low-income savers in the study period. The second investigated the impact that micro finance has on the performance of small and medium scale enterprises. Each of the models was subjected to the Ordinary Least Square regression to determine the appropriateness of models estimated. Findings from the empirical results in model one (1) and two (2) indicated relationship between financial inclusion in Nigeria, microfinance, and small business enterprises over 10 years period of study. The study found out that there is a significant relationship between financial inclusion and financial well – being of the low income earners. Empirical finding that examines the relationship between microfinance and small business in Nigeria indicates that there is a negative significant relationship between loan to small enterprises and loan to rural areas in Nigeria in the period under study. The study suggests therefore that financial inclusion will have a positive significant impact on the development of small business if the plan to include everyone works in Nigeria.
Microfinance is gradually acknowledged as an effective tool of poverty reduction in the developing countries. This is because microfinance service providers play a significant role of ensuring access to financial services for the poorest segments of the society. The present study links financial performance with outreach to examine mission drift concern in the transformed
Exploring Digital Payments, Financial Inclusion, and Monetary Policy in Indiaijtsrd
The global financial landscape has undergone a profound transformation with the advent of digital payment technologies, influencing monetary policy paradigms and fostering financial inclusion initiatives. This research investigates the interplay between digital payments, financial inclusivity, and their relationship with the overarching objectives of monetary policy. The study delves into the multifaceted impact of digital payment systems on the attainment of monetary policy goals. It scrutinizes the role of digital financial services in fostering greater access to financial resources for underserved populations, thereby addressing issues of financial exclusion. Moreover, it assesses the implications of enhanced financial inclusivity on broader economic variables, such as consumption patterns, savings behavior, and income distribution, which are pivotal concerns for central banks in their pursuit of stability and growth. Furthermore, the research analyzes the efficacy of digital payment infrastructures in influencing the transmission mechanisms of monetary policy. It investigates how these technologies may alter the velocity of money, liquidity preferences, and the effectiveness of policy tools in steering economic variables toward desired targets, such as price stability and sustainable growth. The findings of this research are expected to contribute to policy discourse by providing a nuanced understanding of how leveraging digital payment innovations can potentially align with and augment the efficacy of monetary policy frameworks. Ultimately, it seeks to offer recommendations for policymakers, financial institutions, and regulators to leverage digital finance as a catalyst for advancing both financial inclusion goals and the broader aims of monetary policy in an increasingly digitalized global economy. Dr. J. Suresh Kumar | Dr. D. Shobana "Exploring Digital Payments, Financial Inclusion, and Monetary Policy in India" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd63443.pdf Paper Url: https://www.ijtsrd.com/economics/financial-economics/63443/exploring-digital-payments-financial-inclusion-and-monetary-policy-in-india/dr-j-suresh-kumar
FINANCIAL INCLUSION AND WOMEN EMPOWERMENT IN UGANDA A CASE OF LANGO SUB REGIO...ectijjournal
Women empowerment has taken a center stage in the present development agenda. The study examines the role of financial inclusion in supporting women empowerment in Lango sub region, Northern Uganda. Using both purposive and simple random sampling a Sample of 126 respondents was selected with a response rate of 100% realized. The study found out that financial support appeared to be sparse, The regulations, supervision and monitoring of some of these firms was lacking, causing many women to lose their savings with such firms. The study therefore recommended that Government should establish buffers to serve as collateral security for women who intend to secure financial credit. Financial service providers should lower down the costs of operating accounts for the financial inclusiveness of women, particularly women from rural areas. Government should tighten monitoring, regulating and supervisory policies of financial service providers to restore public trust in financial institutions in Uganda. Financial services providers, government and other development partners should offer both formal and informal business education training.
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
Salma Karina Hayat is Conscious Digital Transformation Leader at Kudos | Empowering SMEs via CRM & Digital Automation | Award-Winning Entrepreneur & Philanthropist | Education & Homelessness Advocate
Perceptions of People from Economically Backward Section towards Financial In...iosrjce
Financial Inclusion aims to provide the financial services to the people from economically backward
section of the society. The objective is to assist them in their economic improvement and achieve the sustainable
growth. In this study, an effort has been made to examine the views of the people from economically backward
sectionregarding the important aspects of financial inclusion. Views of 53 respondents are analyzed. ChiSquare,
nonparametric statistical technique, has been used to examine whether the views of the different
categories of the respondents about the important aspects of financial inclusiondiffer. Based on the views of the
respondents we found that bank employees are encouraging people from economically weaker sections to open
their accounts and people also found these accounts useful. Respondents are also of the view that education
level, income level, age and period of association of the account holder with the bank directly affects the quality
of services rendered. To further enhance the utility of the scheme and ensure its success, there is a need to
provide training to bank staff so that the quality of services rendered is not differentiated between different
categories of customers. Further, whereas this study pertains to the views of the economically weaker section,
there is a need to examine the views of bankers also, so that this scheme can be made more useful.
Effective sources and uses of finance is one of the primary activities for the success of a
business, where imprudent financing practices have been identified as a key constraint for the development
of the SME sector. For instance, the empirical evidence suggests that uncertainties of the SMEs due tolack
of skills and knowledgeable workers, economic fluctuations and financingcosts at firm level constitutes to het
ride from proper access to formal financing
Microfinance and the Challenge of Financial Inclusion for Sme’s Development i...IOSRJBM
This paper examined microfinance and the challenge of financial inclusion for SMEs development in Nigeria. The study adopted two separate econometrics models for capturing and testing for significance in the stated objectives between 2005 and 2015. The first model determined whether financial inclusion improve the financial well-being of low-income savers in the study period. The second investigated the impact that micro finance has on the performance of small and medium scale enterprises. Each of the models was subjected to the Ordinary Least Square regression to determine the appropriateness of models estimated. Findings from the empirical results in model one (1) and two (2) indicated relationship between financial inclusion in Nigeria, microfinance, and small business enterprises over 10 years period of study. The study found out that there is a significant relationship between financial inclusion and financial well – being of the low income earners. Empirical finding that examines the relationship between microfinance and small business in Nigeria indicates that there is a negative significant relationship between loan to small enterprises and loan to rural areas in Nigeria in the period under study. The study suggests therefore that financial inclusion will have a positive significant impact on the development of small business if the plan to include everyone works in Nigeria.
Microfinance is gradually acknowledged as an effective tool of poverty reduction in the developing countries. This is because microfinance service providers play a significant role of ensuring access to financial services for the poorest segments of the society. The present study links financial performance with outreach to examine mission drift concern in the transformed
Exploring Digital Payments, Financial Inclusion, and Monetary Policy in Indiaijtsrd
The global financial landscape has undergone a profound transformation with the advent of digital payment technologies, influencing monetary policy paradigms and fostering financial inclusion initiatives. This research investigates the interplay between digital payments, financial inclusivity, and their relationship with the overarching objectives of monetary policy. The study delves into the multifaceted impact of digital payment systems on the attainment of monetary policy goals. It scrutinizes the role of digital financial services in fostering greater access to financial resources for underserved populations, thereby addressing issues of financial exclusion. Moreover, it assesses the implications of enhanced financial inclusivity on broader economic variables, such as consumption patterns, savings behavior, and income distribution, which are pivotal concerns for central banks in their pursuit of stability and growth. Furthermore, the research analyzes the efficacy of digital payment infrastructures in influencing the transmission mechanisms of monetary policy. It investigates how these technologies may alter the velocity of money, liquidity preferences, and the effectiveness of policy tools in steering economic variables toward desired targets, such as price stability and sustainable growth. The findings of this research are expected to contribute to policy discourse by providing a nuanced understanding of how leveraging digital payment innovations can potentially align with and augment the efficacy of monetary policy frameworks. Ultimately, it seeks to offer recommendations for policymakers, financial institutions, and regulators to leverage digital finance as a catalyst for advancing both financial inclusion goals and the broader aims of monetary policy in an increasingly digitalized global economy. Dr. J. Suresh Kumar | Dr. D. Shobana "Exploring Digital Payments, Financial Inclusion, and Monetary Policy in India" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd63443.pdf Paper Url: https://www.ijtsrd.com/economics/financial-economics/63443/exploring-digital-payments-financial-inclusion-and-monetary-policy-in-india/dr-j-suresh-kumar
FINANCIAL INCLUSION AND WOMEN EMPOWERMENT IN UGANDA A CASE OF LANGO SUB REGIO...ectijjournal
Women empowerment has taken a center stage in the present development agenda. The study examines the role of financial inclusion in supporting women empowerment in Lango sub region, Northern Uganda. Using both purposive and simple random sampling a Sample of 126 respondents was selected with a response rate of 100% realized. The study found out that financial support appeared to be sparse, The regulations, supervision and monitoring of some of these firms was lacking, causing many women to lose their savings with such firms. The study therefore recommended that Government should establish buffers to serve as collateral security for women who intend to secure financial credit. Financial service providers should lower down the costs of operating accounts for the financial inclusiveness of women, particularly women from rural areas. Government should tighten monitoring, regulating and supervisory policies of financial service providers to restore public trust in financial institutions in Uganda. Financial services providers, government and other development partners should offer both formal and informal business education training.
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
Salma Karina Hayat is Conscious Digital Transformation Leader at Kudos | Empowering SMEs via CRM & Digital Automation | Award-Winning Entrepreneur & Philanthropist | Education & Homelessness Advocate
When listening about building new Ventures, Marketplaces ideas are something very frequent. On this session we will discuss reasons why you should stay away from it :P , by sharing real stories and misconceptions around them. If you still insist to go for it however, you will at least get an idea of the important and critical strategies to optimize for success like Product, Business Development & Marketing, Operations :)
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1. SEMINAR ON:
FINANCIAL INCLUSION,BANK INTERMEDIATION AN ECONOMIC GROWTH IN NIGERIA
BY:
OMUBO-PEPPLE STELLA NATHAN
PG.2020/00527
Submitted To: Prof. J. C. Imegi
November, 2022
2. ABSTRACT
• This seminar paper presents the conceptual, theoretical and empirical review on financial inclusion, bank
intermediation and economic growth which offered some insights on the finance for growth hypothesis. The conceptual
framework deepened the understanding of the concepts of financial inclusion, bank intermediation and economic
growth. Prior to the review of the empirical literature, the theoretical framework was provided, with a focus on the
theory of financial intermediation, underlying theories of financial inclusion and economic growth. A body of previous
studies on the growth effects of financial inclusion and bank intermediation was reviewed. However, despite the
popularity of the finance for growth hypothesis, there are some controversies in the existing empirical literature which
created a gap in literature on the effectiveness of financial inclusion and bank intermediation in promoting economic
growth. Thus, this study sets out to fill this gap by employing a wider range of indicators that capture the
multidimensional aspect of financial inclusion and intermediation and how they affect economic growth in Nigeria.
3. INTRODUCTION
• Achieving sustainable economic growth has remained a fundamental macroeconomic objective in Nigeria and
other developing economies. This is because economic growth, which defines the monetary value of final
output of goods and services, has been identified as a powerful tool for reducing poverty and improving the
quality of life in developing countries.
• It has been preoccupation of the policymakers to promote economic growth through the formulation and
implementation of various policies. Notably, the role financial inclusion and bank intermediation play in
promoting economic growth has been exemplified in body of finance literature.
• It is expected to boost economic growth and development by making funds available for investment and
lubricating the economy. Nwafor and Yomi (2018) posit that financial inclusion is imperative for improved
financial access which spurs the economy into higher growth due to its ability to expedite efficient allocation of
productive resources.
• Aside from financial inclusion, financial intermediation has received widespread recognition as important
driver of economic growth. Odedokun (1998) posits that financial intermediation drives economic growth by
providing a pathway for linking lenders and borrowers to establish a financial transaction.
4. AIM AND OBJECTIVES
• This study seeks to examine the effect of financial inclusion and bank intermediation on economic growth in
Nigeria. However, the specific objectives are to:
• determine the effect of financial service usage on economic growth in Nigeria;
• examine the effect of financial service access on economic growth in Nigeria;
• ascertain the effect of the ratio of the broad money supply to GDP on economic growth in Nigeria;
• ascertain the effect of the ratio of credit to the private sector on economic growth in Nigeria; and
• determine causality between financial inclusion and bank intermediation on economic growth in Nigeria.
5. CONCEPTUAL FRAMEWORK
• Financial inclusion: Financial inclusion defines the provision of access to financial services to all members of population
particularly the poor and the other excluded members of the population. Dev (2006) posits that financial inclusion involves the
delivery of banking services at an affordable cost to the vast sections of the disadvantaged and low-income groups.
• Bank interemediation: Financial intermediation defines a system of channeling funds from lenders (economic surplus unit) to
borrowers (economic deficit unit) through financial institutions. It also involves the transformation of mobilized deposits
liabilities by financial intermediaries such as banks into bank assets or credits such as loan and overdraft.
• Economic growth: Economic growth is generally referred to as a quantitative change in economic variables, normally
persisting over successive periods. it is determined by tavailability of natural resources, the rate of capital formation, capital-
output ratio, technological progress, dynamic entrepreneurship and other factors.
6. THEORETICAL FRAMEWORK
• THEORY FINANCIAL INTERMEDIATION:The financial intermediation theory was proposed by Gurley and Shaw (1960). The theory is based on the
assumption of asymmetry information between surplus and deficit spenders. Thus, information asymmetry is assumed to exist due to informational
difference between the lenders of funds and the borrowers.
• PUBLIC GOODS THEORY OF FINANCIAL INCLUSION: Samuelson (1954) propounded the public good theory of financial inclusion, and it’s
based on the assumption that the (i) delivery of formal financial services to the entire population and (ii) ensuring that there is unrestricted access to
finance for everyone should be treated as a public good for the benefit of all members of the population. Individuals cannot be barred from using
formal financial services as a public good, and individuals cannot be barred from gaining access to financial services.
• THE DISSATISFACTION THEORY OF FINANCIAL INCLUSION;he dissatisfaction theory of financial inclusion was proposed by Herzberg,
Mausner, and Snyderman (1959), and it is based on the assumption that financial inclusion activities and programmes in a country should first be
targeted to all individuals who were previously on-boarded into the formal financial sector but left the formal financial sector because they were
dissatisfied with the rules of engagement in the formal financial sector, or had other unfavourable personal experiences from dealing with firms and
agents in the formal financial sector.
• VULNERABLE GROUP THEORY OF FINANCIAL INCLUSION: The vulnerable group theory of financial inclusion was propounded by
Fineman (2008) and it is based on the assumption that financial inclusion activities or programmes in a country should be targeted at the most
vulnerable members of society, such as poor people, young people, women, and elderly people, who suffer the most from economic hardship and
crises.
• SYSTEMS THEORY OF FINANCIAL INCLUSION :The systems theory of financial inclusion was proposed by the biologist von Bertalanffy (1950)
and furthered by Ashby (1958). It is based on the assumption that financial inclusion outcomes are achieved through the existing sub-systems
(whether economic, social, or financial systems) that financial inclusion relies on, and that, as a result, greater financial inclusion will have positive
benefits for the systems it relies on.COMMUNITY ECHELON THEORY OF FINANCIAL INCLUSION:The theory of community echelon was
propounded by Hambrick and Mason (1984), and it was based on the assumption that financial inclusion should be delivered to the financially-
excluded population through their communal leaders. Based on the assumptions, the community echelon theory argues that community leaders are
influential in their communities and can use their influence to encourage or persuade community members to participate in the formal financial
sector.
7. EMPIRICAL LITERATURE
• Oluwasogo, Princess, Oluwatoyin and Folasade (2017) examined the effect of financial intermediation on economic growth in Nigeria. The study period covered between 1980
and 2014. The unit root test was carried out using the Augmented Dickey-fuller and Philip-Perron tests in order to confirm the stationarity of the data, then the Johansen co-
integration test was used to estimate the long run relationship between the dependent and independent variables in this study. The Vector Error Correction Model (VECM) test
was conducted. The result showed that financial intermediation has a long-run relationship with economic growth in Nigeria. Thus, the study recommended that the regulatory
authorities such as CBN having obtained knowledge from this research work on the impact of financial intermediation on economic growth should encourage and enhance the
activities of financial intermediaries.
• Kim, Yu and Hassan (2018) examined how financial inclusion contributed to economic growth in 55 Organization of Islamic Cooperation (OIC) countries. The study employed
panel data for each of the selected 55 OIC countries. The method of data analysis include dynamic panel estimation, panel vector autoregressive (VAR), impulse response
functions (IRFs), and panel Granger causality tests. The results of dynamic panel estimations revealed that financial inclusion has a positive effect on economic growth.
• Nwafor (2018) investigated the relationship between financial inclusion and economic growth in Nigeria. The corresponding data spanning from 2001 to 2016 were obtained and
tested using Two-staged Least Squares Regression method. The findings revealed that financial inclusion have significant impact on economic growth in Nigeria and that financial
industry intermediation have not influenced financial inclusion within the period under review. Based on the findings, the study recommended that Nigerian banks should develop
financial products to reach the financially excluded regions of the country as this will increase GDP per capital of Nigeria and consequently economic growth
• Monsura and Villaruz (2021) analyzed the effect of financial intermediation on economic growth and the existence of cointegrating relationship using time-series data from 1986
to 2015. The influence of financial intermediation in terms of bank credit to bank deposit ratio, private credit, and stock market capitalization and time trend to economic growth
was estimated using ordinary least squares (OLS) multiple regression. The results showed that all the financial intermediation indicators and time trend exerted significant effect
on GDP per capita. The positive sign of the time trend indicates that there is an upward trend in GDP per capita averaging approximately 0.06 percent annually. Furthermore, the
cointegration test using the Johansen procedure revealed that there is a evidence of long-term equilibrium relationship between financial intermediation and economic growth, and
rules out spurious regression results.
• Younass(2022) explored the impact of the financial inclusion and size of the shadow economy on the economic growth of developing economies over the period 2008–2017. The
data for the endogenous, exogenous and control variables were collected from the World Development Indicators, the International Monetary Fund's (IMF) Financial Access
Survey (FAS) and Medina and Schneider's global database (2019). The study applied a panel ordinary least square (OLS) fixed effect, a two-step difference generalised method of
moments (GMM) and panel Granger causality approach. The results revealed that financial inclusion has a positive and statistically significant impact on economic growth
8. This study sets out to fill the gaps in the existing literature. Unlike
previous studies, this study shall improve on the later studies by
employing a wider range of indicators that capture the multidimensional
aspect of financial inclusion and intermediation in Nigeria which cut
across financial service usage and accessibility as well as the overall
process of financial intermediation in Nigeria.
In addition, this study shall employ a representative of the sub-sectoral
and compositional aspects of economic growth with a focus on
agriculture, industrial and service sectors GDP which are distinct from the
previous studies reviewed. This shall make improvement to previous
studies and deepen the understanding of the distribution growth
implications of financial inclusion and intermediation across various
sectors of the Nigerian economy.
LITERATURE GAP
9. CONCLUSION
• The role of financial inclusion and bank intermediation in boosting economic growth has remained at
the epicenter of contemporary research in finance. This has continued to attract the attention of
policymakers and researchers alike.
• While some of the previous studies revealed that financial inclusion is important for economic growth,
others found no evidence to justify the hypothesis of finance for development. In addition, evidence of
positive contributions of bank intermediation to economic growth was also established in some later
studies while other studies indicate that bank intermediation does not promote economic growth.
• The controversies surrounding the later studies have raised concern on the effectiveness of the growth
implications of financial inclusion and bank intermediation, thus creating a gap in literature. In view of
the foregoing, this study shall examine how financial inclusion and bank intermediation affects
economic growth in Nigeria.