Financial Inclusion and its Effect on the Growth of the Nigerian Economy

Financial Inclusion implies as a strategy has become a policy issue around the globe including Nigeria, and it has been perceived as a transmission mechanism for poverty eradication and a means of pursuing inclusive Economic Growth. This study examined the comparative study which is focused on the financial inclusion and its effect on the growth of the Nigerian economy. In reference to the theoretical framework, the finance-growth theory was adopted as the underpinning theory that this study is based on. The data extracted from secondary sources for econometric analysis covered the period between 1990 and 2023 while the Vector Autoregressive Model was used as the method of analysis; which is based on the stationarity test results where the variables were stationary at level, 1st and 2nd difference. The variables used are; inflation, domestic credit provided by financial sector, Poverty head count ratio at $2.15 a day (2017 PPP), Unemployment and Urban population growth (annual %) which the domestic credit provided by financial sector stands as the dependent variable. According to the apriori expected outcome, the dependent variable DOMC is affected by INFL, POV, UNEM, URB but based on the result from stationarity test, the dependent variable was isolated from the VAR analysis to determine the causality test relationship between the independent variables and the lag value relationship between the variables. This study focuses on other regression results like the VAR stability condition, residual diagnostics and autocorrelation test to determine how important the study towards the forecasting for the growth of the economy. Due to the fact that inflation is determined by the activity of poverty rate, urban rate of the population, it is recommended that for economy to improve, more emphasis should be on these listed areas for a better understanding and policies