EFFECT OF FINANCIAL INCLUSION ON PERFORMANCE OF FINANCIAL INSTITUTIONS IN NIGERIA

Abstract

This study examined the relationship between financial inclusion and performance of financial institutions in Nigeria between 2013 and 2022, using return on asset as proxy for financial performance while mobile payment transaction, automated teller machine, point of sales and web pay transaction were used as proxies for financial inclusion. The study adopts an ex-post facto research design. Time series data, which was largely obtained from secondary sources over a 10 year period were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and Annual Audited Report of the sampled companies. The population of the study consists of all the 13 Commercial Banks and 22 Insurance Companies listed on the Nigeria Exchange Group (NGX) as at 31^st December, 2022. Ordinary Least Square Regression Analysis was applied in hypotheses testing with the aid of SPSS version 20.0. The findings revealed that Mobile payment transactions (MPT), automated teller machine (ATM), point of sales (POS) and web pay transaction (WPT) have no significant effect on the return on asset of financial institutions in Nigeria. It was concluded that, financial inclusion policy has insignificantly and negatively effects on the performance of commercial banks and insurance companies in Nigeria. Based on the above findings the study recommends that, there is the need for government, corporate organizations, insurance companies and commercial banks in particular, as a matter of necessity provide affordable critical infrastructure such as power, access to internet and enlightenment campaigns on all payments system, particularly the unbanked populace in the villages which would ultimately increase financial inclusion and enhance performance service delivery to all cities and towns in Nigeria as this will increase consumer’s patronage of mobile payment transactions, point of sales, automated teller machine and web pay transactions.