ISSN – PRINT:2756-4495 | ONLINE: 2756-4487

Volume 03, Issue 03 – 2023

DOI: 10.60089/dbebj.2023.3.3.12  

The Effect of Financial Inclusion on Poverty in Nigeria

 a-f Central Bank of Nigeria

John Akin Sodipo (a)      ORCID: Email:,

Nenubari John Ikue (b) ORCID:; Email:,

Linus B. Enegesi (c)     ORCID: Email:,

Charles Nonso Oraemesi (d) ORCID:; Email:,

Daniel Nma Yisa (e) ORCID:; Email:,

Jude Chukwuka Ejinkonye (f) ORCID:; Email:



The opinions expressed in this paper do not represent the views of the Central Bank of Nigeria in any capacity. The findings presented herein solely reflect the perspectives and conclusions of the authors of this paper.


The study investigates the nexus between financial inclusion and poverty in Nigeria, a nation where about 60% of the population lacks access to formal financial products and services. Financial inclusion is viewed as a crucial tool for alleviating poverty, and the research delves into the intricate interplay between these two factors in both urban and rural settings. Employing a linear probability model, the findings reveal that while having an account with a financial institution is positively correlated with poverty reduction, it does not stand alone as a solution for eradicating poverty. In this context, financial literacy plays a pivotal role in empowering individuals to make informed financial decisions, ultimately facilitating their escape from poverty. The promotion of financial literacy initiatives is of paramount importance. Furthermore, the study highlights the role of household size in poverty reduction. Smaller households, typically composed of 1-4 individuals, exhibit a greater potential for poverty reduction, while larger household sizes are associated with an increased likelihood of poverty. This pattern is consistent in both urban and rural areas, underscoring the need for precise interventions and policies that address the distinct challenges faced by rural communities, and concurrently, promote financial inclusion and stimulate economic development. In conclusion, the study underscores the significance of adopting a comprehensive approach to poverty reduction in Nigeria. It underscores the roles of financial inclusion, financial literacy, and customized strategies that consider household sizes and geographic contexts. By addressing these factors, policymakers, financial institutions, and communities can collaborate to develop sustainable solutions that uplift households from poverty and contribute to a more inclusive and prosperous society.


JEL: G5 I32 J30


Keywords: Poverty; Household Finance; Household Size, Urban; Rural