FINANCIAL TECHNOLOGY AND POVERTY REDUCTION IN NIGERIA

Abstract

Despite the advancement of financial innovations and inclusion, poverty remains a major issue 
in Nigeria due to the existence of high poverty incidence rates, which pose pressure on people’s 
standard of living. Therefore, the study examines the impact of financial technology on poverty 
reduction in Nigeria from 1986 to 2024. Annual time series data was sourced from World Bank, 
and Central Bank of Nigeria, while the data were analysed using vector error correction 
mechanisms (VECM). The findings of the study showed that fintech and inflation have 
negative but significant impact on poverty reduction in Nigeria. The results further found that 
financial inclusion, and deepening, have positive but insignificant impact while literacy rate 
and institutional quality have positive and significant impact on poverty in Nigeria. It is 
suggested that efforts should be made by policymakers to encourage digital financial 
innovations, and expand financial inclusion initiatives in order to achieve reduction in the 
levels of poverty.