Fintech Innovations on Financial Inclusion in Nigeria

Abstract

This study investigates the relationship between FinTech innovations and financial inclusion in Nigeria, covering the period from 2000 to 2024. The primary objective is to analyze how various FinTech innovations, including mobile money services, digital payment systems, and digital lending platforms, contribute to the overall financial inclusion in the country. The study adopts a quantitative research design, utilizing secondary data from the Central Bank of Nigeria (CBN), NIBSS, and the EFInA Access to Financial Services in Nigeria Survey. The Ordinary Least Squares (OLS) regression model in E-Views 9.0 is used to estimate the relationships between the dependent variable, financial inclusion (proxied by the Financial Inclusion Index (FII)), and the independent variables, which include Mobile Money System Transactions (MMST), Digital Payment Systems Transactions (DPST), Digital Lending Platforms Loan Volume (DLPLV), and FinTech Active Regulation (FAR).The findings of this study indicate that MMST shows a strong positive relationship with financial inclusion, with a significant coefficient (11.13) and a p-value of 0.0000, confirming that mobile money systems play a crucial role in enhancing financial inclusion. The results also show that DPST has a significant impact on financial inclusion (coefficient = 0.0535, p-value = 0.0408), which aligns with the Financial Inclusion Theory, highlighting the role of digital payments in providing access to financial services. DLPLV demonstrated a positive effect on financial inclusion (coefficient = 0.228, p-value = 0.0167), supporting the theory that providing access to credit contributes to broader inclusion. However, FAR did not show a significant effect on financial inclusion (coefficient = 0.000098, p-value = 0.9962), indicating that the current regulatory frameworks may not be sufficiently robust to drive substantial growth in financial inclusion.This study concludes that while FinTech innovations, particularly mobile money and digital payments, significantly promote financial inclusion in Nigeria, there is a need for stronger regulatory frameworks to enhance the role of regulation in this process. Recommendations include increasing mobile money adoption, supporting digital payment systems, promoting digital lending platforms, and improving regulatory enforcement topayment systems, promoting digital lending platforms, and improving regulatory enforcement to