Effect of Official Development Assistance on Financial Inclusion in Nigeria

Abstract

The study examines the effects of official development assistance on financial inclusion in Nigeria. The research design for the study was ex-post-facto. Time series secondary data were collected from Central Bank of Nigeria, Statistical Bulletin, 2023. Descriptive statistics, correlation analysis and unit root test were used to analyse the data collected. The model was estimated with Autoregressive distributed lag model. The independent variable was official development assistance, accompanied with both exchange and inflation rates. The dependent variable was financial inclusion; with its proxy as loan to rural commercial banks in Nigeria. The findings revealed that official development assistance has a statistically significant and positive effect on financial inclusion in Nigeria. Also, exchange rate has a statistically significant effect on financial inclusion in Nigeria. However, inflation does not significantly influence financial inclusion. Arising from the findings, the study recommended that in order to enhance the effectiveness of official development assistance, government and policymakers should ensure that official development assistance is channeled effectively into programmes that promote access to banking, digital finance, and microcredit services, particularly in underserved communities.