DOES THRESHOLD OF FINANCIAL DEVELOPMENT MATTERINREDUCINGPOVERTY LEVEL IN NIGERIA?

Abstract

The study examined threshold levels of financial development indices (overall financial development index (as baseline model), and financial institution index, financial market index (for robustness checks) that reduced poverty level in Nigeria between 1970 and2023. Threshold regression technique was employed for the analysis of the data. Threshold values of between 15 to 17 per cent as minimum values upon which poverty level could be reduced was established in Nigeria for the overall financial development index. However, threshold value of not less than 17 per cent was found for financial institution index and it was significant. Meaning that financial institution was weak in Nigeria given the period under investigation. Meanwhile, a threshold of 18 per cent was found for financial market index. Albeit, not significant. The study therefore concluded that poverty level could only be reduced when financial development is promoted up to threshold level of between 15to17percent in Nigeria