Effect of financial inclusion on entrepreneurial growth in retail and wholesale sub-sectors: Evidence from Nigeria

Abstract

Financial inclusion has been globally recognised as essential for capital accumulation, easy financial services accessibility, poverty alleviation as well as entrepreneurial and economic growth. As Nigerian government is making progress in the achievement of financial inclusion, many businesses seems to be springing up in the financial and other economic sectors with intention to tap from the growing access to official financial services. This paper aims at ascertaining the effect of financial inclusion (FI) on entrepreneurial growth (EG) in retail and wholesale sub-sectors in Nigeria using quarterly data from the World Bank's World Development Indicators and the Central Bank of Nigeria. Data were analysed using correlation analysis and error correction approach. The results reveal that FI has a significant positive effect on EG particularly in the context of the retail and the wholesale subsectors contributions to gross domestic product (GDP). The results further indicate that account ownership (ACN) did not have significant influence on the growth rate of the retail and the wholesale sub-sectors, while commercial bank branches (CMB) was found to have significant influence on the growth rate of the retail and the wholesale sub-sectors. This implies that CMB is a critical FI channel with potentials of driving the EG particularly in the context of the retail and the wholesale sub-sectors contributions to GDP. We recommend that government should establish more CMB in all rural areas in Nigeria for easy access to official financial products by the unbanked entrepreneurs. Also, FI stakeholders should deepen efforts in encouraging ACN through improving on financial literacy of the vast unbanked populace so that formal financial system through capital accumulation can serve the needs of entrepreneurs for effective growth and contributions to GDP.

Do Digital Finance and the Technology Acceptance Model Strengthen Financial Inclusion and SME Performance?

“…However, most previous attempts have presented FI as the only global solution to SME growth and development [33,34]. In addition, the growth and development of SMEs are positively influenced by mobile banking, banking services and banking penetration as FI dimensions [35,36]. While considering further the relationship between accessibility and operations of the business sector, the ability to engage financial services assists in develop ping the firm, managing the financial and non-financial activities properly while reducing risk, and withstanding financial shocks to entrepreneurs and real sector business owners.…”

Financial Inclusion and Financial Performance of Deposit Money Banks in Nigeria

“…The study recommends Jordanian financial institutions to move toward increasing innovative access to financial services as well as enhancing IT infrastructure and the development of financial services to raise the level of digital banking services which is currently considered relatively low when compared to other middle-income countries. Anastesia et al (2020) aimed at ascertaining the effect of financial inclusion (FI) on entrepreneurial growth (EG) in retail and wholesale sub-sectors in Nigeria using quarterly data from the World Bank's World Development Indicators and the Central Bank of Nigeria. Data were analysed using correlation analysis and error correction approach.…”

“…Several studies were carried out analyzing and comparing the determinants of financial inclusion among regions (Sarma & Pais, 2011;Gupte et al, 2012;Akudugu, 2013;Hassan, 2015;Park & Mercado, 2015;Lotto, 2016;Hillary, 2016;Uddin et al, 2017;Abel et al, 2018;Hussaini & Chibuzo, 2018;Neaime and Gaysset, 2018;Anyanwu et al, 2018;Mdasha et al, 2018;Ojwang & Otinga, 2019;Kapaya, 2019;Kinyua & Omagwa, 2020;Al-Chahadah et al, 2020;Koomson et al, 2020;Singh, 2020;Anastesia et al, 2020;Kamal, 2021;Eze & Alugbuo, 2021;Johnpaul & Patience, 2021;Maity & Sahu, 2021;Naser & Alabassi, 2022;Al-Eitan et al, 2022;Winful et al, 2022). However, most of the previous studies focused on the determinants of financial inclusion in the developing countries of Asia, South America, Europe, North Africa, Sub-Saharan Africa or in countries such as Bangladesh, India, China and Indonesia.…”

“…H 5 : There is no significant relationship between agent banking and return on assets of deposit money banks in Nigeria. Anastesia et al (2020) opined that financial inclusion is the process of extending financial products to the unbanked and vulnerable populace. This process enables individuals and businesses to have access to financial services such as deposit, loans, insurance, payments and fund transfer at their convenience and to meet economic needs.…”

Technology of Electronic Banking on Financial Inclusion Policy: The Nexus on Entrepreneurial Growth in Rural Communities, Akwa Ibom State, Nigeria

“…The study recommended that loans to rural areas should receive considerable attention from relevant authorities, to effect strongly and positively on entrepreneurial development in Nigeria. Anastasia et al, (2020) investigated the effect of financial inclusion on entrepreneurial growth in retail and wholesale sub-sectors in Nigeria using quarterly data from the World Bank's Development Indicators and the Central Bank of Nigeria. The result revealed that financial inclusion has a significant and positive effect on entrepreneurial growth.…”