Research Article | Open Access | Download Full Text
Volume 2 | Issue 3 | Year 2023 | Article Id: DST-V2I3P102 DOI: https://doi.org/10.59232/DST-V2I3P102
Digital Banking Technology and Financial Inclusion in Nigeria
Marshal Iwedi
| Received | Revised | Accepted | Published |
|---|---|---|---|
| 30 Jun 2023 | 15 Jul 2023 | 02 Aug 2023 | 19 Aug 2023 |
Citation
Marshal Iwedi. “Digital Banking Technology and Financial Inclusion in Nigeria.” DS Journal of Digital Science and Technology, vol. 2, no. 3, pp. 9-16, 2023.
Abstract
The paper empirically tests the effect of the digital banking model on financial inclusion in Nigeria. The study adopted the financial time series methodology in collecting quarterly data, and these secondary data were extracted from the Central Bank of Nigeria Statistical Bulletin (2021) for a period of twelve (12) years ranging from 2009 – 2021. Quarterly time series data on the volume of transactions on Automatic Teller Machines (ATM), volume of transactions on the Point of Sale (POS), volume of transactions on Web Banking Technology (WBT), and volume of transactions on Mobile Banking Technology (MBT) in Nigeria form the independent variables. At the same time, the ratio of total deposit to gross domestic product was used as a proxy for financial inclusion in Nigeria. The estimation technique of the pairwise granger causality test was used to analyze the data. The pairwise granger causality test was used because it has proven useful in describing whether a one-time series is useful in forecasting another. The paper found that the digital banking model significantly and critically influences Nigeria's financial inclusion. Therefore, we conclude that despite the challenges faced by the banks in Nigeria, there is still great potential for incorporating more mobile and internet-based banking services into the banking system in order to improve financial inclusion in the country.
Keywords
Digital banking, Mobile banking, Financial technology, Financial inclusion, Banking sector, Nigeria.
References
[1] Joshua Yindenaba Abor, Mohammed Amidu, and Haruna Issahaku, “Mobile Telephony, Financial Inclusion and Inclusive Growth,” Journal of African Business, vol. 19, no. 3, pp. 430–453, 2018.
[CrossRef] [Google Scholar] [Publisher Link]
[2] Alexander Adhitya, and H.M. Roy Sembel, “The Impacts of Mobile Banking Technology Adoption on the Financial Performance and Stock Performance of Big Bank in Indonesia,” South East Asia Journal of Contemporary Business, Economics and Law, vol. 22, no. 1, pp. 63-73, 2020.
[Google Scholar] [Publisher Link]
[3] S. Ananda, Sonal Devesh, and Anis Moosa Al Lawati, “What Factors Drive the Adoption of Digital Banking? An Empirical Study from the Perspective of Omani Retail Banking,” Journal of Financial Services Marketing, vol. 25, no. 1, pp. 14–24, 2020.
[CrossRef] [Google Scholar] [Publisher Link]
[4] Mihasonirina Andrianaivo, and Kangni Kpodar, “Mobile Phones, Financial Inclusion, and Growth,” Review of Economics and Institutions, vol. 3, no. 2, pp. 1–30, 2012.
[CrossRef] [Google Scholar] [Publisher Link]
[5] Niklas Arvidsson, “Consumer Attitudes on Mobile Payment Services – Results from a Proof of Concept Test,” International Journal of Bank Marketing, vol. 32, no. 2, pp. 150–170, 2014.
[CrossRef] [Google Scholar] [Publisher Link]
[6] Simplice A. Asongu, and Sara Le Roux, “Enhancing ICT for Inclusive Human Development in Sub-Saharan Africa,” Technological Forecasting and Social Change, vol. 118, pp. 44–54, 2017.
[CrossRef] [Google Scholar] [Publisher Link]
[7] Simplice A. Asongu, and Nicholas M. Odhiambo, “How Enhancing Information and Communication Technology has Affected Inequality in Africa for Sustainable Development: An Empirical Investigation,” Sustainable Development, vol. 27, no. 4, pp. 647-656, 2019.
[CrossRef] [Google Scholar] [Publisher Link]
[8] Simplice Asongu, “The Impact of Mobile Phone Penetration on African Inequality,’’ International Journal of Social Economics, vol. 42, no. 8, pp. 706–716, 2015.
[CrossRef] [Google Scholar] [Publisher Link]
[9] Yilmaz Bayar et al., “Impact of Mobile Phones and Internet Use on Financial Inclusion: Empirical Evidence from the EU Post–Communist Countries,” Technological and Economic Development of Economy, vol. 27, no. 3, pp. 722-741, 2021.
[CrossRef] [Google Scholar] [Publisher Link]
[10] Diether W. Beuermann, Christopher McKelvey, and Renos Vakis, “Mobile Phones and Economic Development in Rural Peru,” The Journal of Development Studies, vol. 48, no. 11, pp. 1617–1628, 2012.
[CrossRef] [Google Scholar] [Publisher Link]
[11] George Okello Candiya Bongomin et al., “Mobile Money and Financial Inclusion in Sub-Saharan Africa: The Moderating Role of Social Networks,” Journal of African Business, vol. 19, no. 3, pp. 361–384, 2018.
[CrossRef] [Google Scholar] [Publisher Link]
[12] Sanjaya Kumar Lenka, and Rajesh Barik, “Has Expansion of Mobile Phone and Internet Use Spurred Financial Inclusion in the SAARC Countries?,” Financial Innovation, vol. 4, 2018.
[CrossRef] [Google Scholar] [Publisher Link]
[13] Amrita Chatterjee, “Financial Inclusion, Information and Communication Technology Diffusion, and Economic Growth: A Panel Data Analysis,” Information Technology for Development, vol. 26, no. 3, 2020.
[CrossRef] [Google Scholar] [Publisher Link]
[14] Amrita Chatterjee, and Nitigya Anand, “Financial Inclusion, Information and Communication Technology Diffusion and Economic Growth: A Panel Data Analysis,” 2017.
[15] Tough Chinoda, and Farai Kwenda, “Do Mobile Phones, Economic Growth, Bank Competition and Stability Matter for Financial Inclusion in Africa?,” Cogent Economics & Finance, vol. 7, no. 1, 2019.
[CrossRef] [Google Scholar] [Publisher Link]
[16] Carla Fernandes, Maria Rosa Borges, and Jorge Caiado, “The Contribution of Digital Financial Services to Financial Inclusion in Mozambique: An ARDL Model Approach,” Applied Economics, vol. 53, no. 3, pp. 400-409, 2021.
[CrossRef] [Google Scholar] [Publisher Link]
[17] Aparna Gosavi, “Can Mobile Money Help Firms Mitigate the Problem of Access to Finance in Eastern Subsaharan Africa?,’’ Journal of African Business, vol. 19, no. 3, pp. 343–360, 2018.
[CrossRef] [Google Scholar] [Publisher Link]
[18] Musa Abdullahi Bayero, “Effects of Cashless Economy Policy on Financial Inclusion in Nigeria: An Exploratory Study,” Procedia - Social and Behavioral Sciences, vol. 172, pp. 49-56, 2015.
[CrossRef] [Google Scholar] [Publisher Link]
[19] Peterson K. Ozili, “Financial Inclusion in Nigeria: Determinants, Challenges and Achievements,” New Challenges for Future Sustainability and Wellbeing, pp. 377-395, 2021.
[Google Scholar] [Publisher Link]
[20] Josephine Olamatanmi Mebawondu, Jacob Mebawondu, Angela Atsanan, “The Impact of Information Technology on Poverty Alleviation in Nigeria,” Continental Journal of Information Technology, vol. 6, no. 1, pp. 1-5, 2012.
[21] Mayowa G. Agboola et al., “Effect of Digitalization on the Performance of Commercial Banks in Nigeria,” IOP Conference Series: Earth and Environmental Science, vol. 331, 2019.
[CrossRef] [Google Scholar] [Publisher Link]
[22] Miguel Angel Esquivias et al., “Mobile Technologies, Financial Inclusion and Inclusive Growth in East Indonesia,” Journal of Telecommunication and the Digital Economy, vol. 8, no. 2, pp. 123-145, 2020.
[Google Scholar] [Publisher Link]
[23] Rizwan Mushtaq, and Catherine Bruneau, “Microfinance, Financial Inclusion and ICT: Implications for Poverty and Inequality,” Technology in Society, vol. 59, 2019.
[CrossRef] [Google Scholar] [Publisher Link]
[24] Peterson K. Ozili, “Theories of Financial Inclusion,” Uncertainty and Challenges in Contemporary Economic Behaviour (Emerald Studies in Finance, Insurance, and Risk Management), pp. 89-115, 2020.
[CrossRef] [Google Scholar] [Publisher Link]
[25] Kimty Seng, “Considering the Effects of Mobile Phones on Financial Inclusion in Cambodia (PRA Paper 82225),” Thesis, University Library of Munich, Germany, 2017.