LEVERAGING FINANCIAL INCLUSION FOR BANK PROFITABILITY IN NIGERIA (2000–2019)

##plugins.themes.academic_pro.article.sidebar##

Published Dec 31, 2024
Download
PDF
Statistic
Vol. 7 No. 2 (2024): December 2024

##plugins.themes.academic_pro.article.main##

James Essien AKPAN
Department of Economics, Nigeria Police Academy, Wudil, Kano State, Nigeria
https://orcid.org/0009-0007-9570-0788

Abstract

This study examines the banking industry in Nigeria over the period of twenty years (2000-2019) with the aim of empirically examining the relationship between financial inclusion and bank profitability. It made use of the available secondary data for this duration to assess the degree to which financial institutions in the country leveraged on financial inclusions to enhance banking profitability. Time series data spanning the period 2000 to 2019 were collected from the Central Bank of Nigeria Statistical bulletin and other secondary sources. The study relied on multiple regression as its major instrument of analysis. The result showed that, the number of commercial bank branches over time was positively associated with bank profitability, while bank average loans to rural communities was negatively related to profitability. The study concludes that, financial inclusion enhanced bank profitability within the period under study. The study therefore recommends that government should foster security in semi-urban and rural areas in order to engender increased financial inclusion and hence bank profitability in the country.

##plugins.themes.academic_pro.article.details##

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

  1. Ahamed, M. M., & Mallick, S. K. (2017). Is financial inclusion good for bank stability? International evidence. Journal of Economic Behavior and Organization, 17(1), 154.
  2. Ahmad, A. (2019). Financial inclusion strategies in Nigeria. Central Bank of Nigeria Annual Report.
  3. Aruwa, S. A., & Naburgi, M. M. (2014). Impact of capital structure on firms' performance: A study of Nigerian listed firms. European Journal of Accounting Auditing and Finance Research, 2(7), 126–136.
  4. Berger, A. N., Hasan, I., & Zhou, M. (2010). The effects of focus versus diversification on bank performance: Evidence from Chinese banks. Journal of Banking & Finance, 34, 1417–1435.
  5. Bassler, N., & Bittelmeyer, C. (2006) in Lawal, L. O., Abubakar, I. A., & Salau, R. A. (2016). Financial inclusion, MSMES and its effects on deposit money banks performance in Nigeria. Journal of Management Research, 5(2) 120–134.
  6. Bernini, C., & Brighi, P. (2017). Bank branches expansion, efficiency and local economic Growth. Regional Studies, 1–14
  7. Bessler, W., & Bittelmeyer, C. (2016). Performance persistence of European mutual funds: A dynamic panel data approach. Journal of Financial Services Research, 50(1), 1–27.
  8. Central Bank of Nigeria. (CBN). (2019). Statistical Bulletin 2018. Abuja: CBN Publications.
  9. Central Bank of Nigeria. (2020). Financial inclusion report. Abuja: CBN Publications.
  10. Deng, S. E., & Elyasiani, E. (2008). Geographic inclusion report: Diversification, bank holding company value, and risk. Journal of Money, Credit and Banking, 40, 1217–1238.
  11. Enhancing Financial Innovation & Access. (2021). Financial inclusion survey in Nigeria.
  12. Ejelonu, H. O., & Okafor, S. (2022). Financial inclusion and micro, small and medium enterprises (MSMEs) development in Nigeria. International Journal of Innovation in Engineering. https://doi.org/10.2139/ssrn.4119384
  13. Fadi, S. (2019). Does financial inclusion influence the banks risk and performance? Evidence from global prospects. Academy of Accounting and Financial Studies Journal, 23(3), 1–12.
  14. Igra, A., & Samreen, C. (2015). Financial inclusion and the performance of the banking sector in Pakistan. International Journal of Management Science and Business Research, 4(1), 88–98.
  15. Iwejor, C. C. (2018). Financial inclusion and economic growth in Nigeria. International Journal of Economics and Financial Issues, 8(3), 136–146.
  16. Ismaila, O. A., Abubakar, G. R., Hassa, I. A., & Abdulkareem, S. A. (2018). Impact of financial inclusion on financial sector performance of money deposit banks in Nigeria. International Journal of Finance, 2(1), 45–60.
  17. Jimoh, Y. I., Shittu, A. T., & Attah, J. A. (2019). Impact of financial inclusion on performance of banks in Nigeria. Fountain University Journal of Management, 4(3), 84–96.
  18. Kama, U., & Adigun, M. (2013). Financial inclusion in Nigeria: Issues and challenges. CBN Working Paper No 1326.
  19. Kolapo, F. T., Dadu, S. P., & ADjaya, A. O. (2022). Financial inclusion and the performance of listed deposit money banks in Nigeria. European Modern Studies Journal, 6(6), 61–72.
  20. Lisa, C., & Jacolin, L. (2016). Financial inclusion, bank concentration and firm performance. Working Paper, No. 615, 1–30.
  21. Martinez, M. V. (2016). Financial inclusion in Latin America. In Handbook of Frontier Markets (pp. 297–311). Academic Press.
  22. Nwala, M. N., & Abubakar, Y. (2017). Financial inclusion and economic growth in Nigeria. International Journal of Economics and Financial Management, 2(1), 84–96.
  23. Nwanne, T. F. I. (2015). Relationship between financial inclusion and economic growth in Nigerian rural dwellers. International Journal of Small Business and Entrepreneurship Research, 3(7), 17–27.
  24. Okafor, T. G. (2018). Environmental cost accounting and reporting on firms financial performance: A survey of quoted Nigerian companies. International Journal of Finance and Accounting, 7(1), 1–6.
  25. Okafor, F. O. (2018). Financial inclusion: A panacea for balanced economic development. Journal of Business and Management, 20(3), 1–8.
  26. Oranya, A., & Ondabu, O. (2018). The effects of financial inclusion on the performance of listed banks at Nairobi Securities Exchange Kenya. International Journal of Scientific and Research Publications, 8(5), 2250–3153.
  27. Onaolapo, A. R. (2015). Effects of financial inclusion on the economic growth of Nigeria (1982-2012). International Journal of Business and Management Review, 3(8), 11–28.
  28. Sariano, D. (2017). Practical business strategies independent quick service restaurants use to sustain beyond five years. Open Journal of Business and Management, 10(4), 126–140.
  29. Watts, R. L., & Zimmerman, J. L. (2019). Positive accounting theory: A ten-year perspective. The Accounting Review, 65(1), 131–156.
  30. World Bank. (2020). Global financial development report.
  31. World Bank. (2021). Financial inclusion database