Remittances, Financial Technology and Financial Inclusion in Nigeria

Abstract

Purpose

This study examines the influence of remittances and financial technology on financial inclusion in Nigeria over the period 1990–2024.

Methodology

The study employs the Autoregressive Distributed Lag (ARDL) modelling framework to estimate short- and long-run relationships among financial inclusion, remittances, and financial technology adoption. Annual time-series data were obtained from the World Bank’s World Development Indicators (WDI) and the International Monetary Fund (IMF). Unit root tests and the ARDL bounds testing approach were applied to establish the existence of a long-run equilibrium relationship among the variables.

Findings

The empirical results indicate that remittances and financial technology exert a statistically significant positive effect on financial inclusion in the short run, suggesting that diaspora inflows and digital technologies act as immediate facilitators of access to financial services. However, the long-run effects of remittances and financial technology are not statistically significant, indicating that these drivers are insufficient to sustain financial inclusion without complementary institutional and infrastructural support. The findings further reveal that weak regulatory frameworks, inadequate digital infrastructure, and low levels of financial literacy constrain the long-term effectiveness of remittances and financial technology in promoting financial inclusion in Nigeria.

Conclusion

The results imply that improvements in financial inclusion in Nigeria are largely policy-driven and short-term rather than structural. To transform short-run gains into sustainable financial inclusion, stronger institutional frameworks, improved regulatory oversight, expanded digital infrastructure, and enhanced financial literacy are required.

The study contributes to the literature by providing long- and short-run evidence on the roles of remittances and financial technology in financial inclusion in a developing economy context, highlighting the importance of institutional and infrastructural factors in sustaining inclusive financial development.