ASSESSING THE IMPACT OF BANKING PENETRATION ON FINANCIAL INCLUSION AND POVERTY REDUCTION IN NIGERIA’S ECONOMY

Abstract

This study examines the impact of banking penetration on financial inclusion and poverty reduction in Nigeria’s economy using time series data of 15 years (2009-2023). The variables used for the study included volume of transactions from ATM, POS and web-pay as the independent variables and unemployment rate as the dependent variable. Quantitative research design was employed for this study.  The time series data was generated and analysed using the Autoregressive Distributed Lagged (ARDL) testing 
technique and the unit root test. The study found that ATM has an insignificant positive effect on the unemployment rate, with an unstandardized coefficient of 2.999 and a p-value of 0.512. Conversely, POS showed a significant impact, with an unstandardized coefficient of 4.698 and a p-value of 0.049. Web-pay was statistically significant on the unemployment rate, with an unstandardized coefficient of -4.329 and a p-value of 0.016. The study concluded that while banking penetration enhances financial inclusion, its impact on unemployment varies by channel. Based on these findings, the study recommended that 
policymakers invest in digital infrastructure, especially for Web-pay systems, to enhance job creation. 
Keywords: ATM, POS, Poverty reduction, Unemployment rate, web-pay