Assessing the Role of Inclusive Finance in Promoting Sustainable Development in Nigeria

Abstract

This study investigated the role of inclusive finance in promoting sustainable development in Nigeria from 2000 to 2023. The research focused on how six indicators of inclusive finance, private sector credit (PSC), bank concentration ratio (BCR), Automated Teller Machine usage (ATM), bank branches per thousand adults (BRN), loan–savings interest rate spread (LSS), and account ownership (ACC), alongside inflation (INFL) as a control variable, influence three key measures of sustainable development: secondary school enrolment (SCE), unemployment reduction (UNE), and infant mortality rate (IMR) reduction. Using descriptive statistics, Pearson correlation, and the Generalized Method of Moments (GMM) estimation technique, the study analyzes the dynamic relationships among these variables. Findings indicate that PSC negatively and significantly affects SCE (–1.127733, p = 0.0212), while BRN (5.054602, p = 0.0001) and ACC (0.013986, p = 0.0003) positively influence it. For UNE, BCR shows a positive significant effect (0.009103, p = 0.0357), whereas BRN has a significant negative impact (–0.400867, p = 0.0321). Regarding IMR, both BRN (–3.559919, p = 0.0021) and ACC (–0.025427, p = 0.0000) significantly reduce infant mortality. The results demonstrated that inclusive finance substantially contributes to achieving sustainable development goals in Nigeria. Policy implications suggest expanding bank branch networks, especially in rural and underserved regions, promoting accessible and low-cost financial products for low-income households, directing private sector credit toward education and job-creating sectors, and ensuring fair competition through reduced bank concentration. These measures can enhance financial inclusion, improve educational outcomes, and foster broader socio-economic well-being.