The effect of financial technology on financial inclusion in Nigeria

Abstract

The study examined effect of financial technology on financial inclusion in Nigeria. The research design for the study was ex-post facto. Time series secondary data were obtained from Central Bank of Nigeria, Statistical Bulletin from 2010 - 2023. The proxies for the independent variable (financial technology) were: Automated Teller Machines, Mobile Pay, Point of Sale, and Web Pay all in volume; while the dependent variable is number of Commercial Bank Branches in Nigeria. Descriptive statistics, correlation analysis and unit root test were the units of analysis. Similarly, ordinary least square was used to estimate the model. ATM usage is negative and statistically significant, implying that higher ATM transactions are associated with a decline in the number of bank branches. Similarly, POS transactions also have a negative and significant effect, indicating that greater adoption of POS payments reduces reliance on traditional banking halls. On the other hand, Web Pay has a positive and significant effect on financial inclusion. Similarly, Mobile Pay shows a positive but statistically insignificant effect. The model’s overall fit is moderate. Based on the findings, the study recommended that policymakers and regulators such as the Central Bank of Nigeria should encourage banks to improve ATM coverage, security, and reliability. Also, policymakers should promote policies that expand the POS network; and also banks should be encouraged to integrate web-based platforms with traditional banking services.