Assessing Financial Inclusion Linkages in Nigeria: A Structural Vector Autoregressive Approach

Abstract

This study examines the extent to which financial inclusion affects economic growth through the capital market in Nigeria. It employs structural vector autoregressive model to establish the transmission path of financial inclusion within the Nigerian economy using quarterly data from 1986Q1 to 2017Q4. Even though the results reaffirmed the significant and positive effect of financial inclusion on growth, it also reveals that the capital market is not a significant link in the growth process. It recommends that the synergy between capital market and deposit money banks be enhance by creating a legislative policy that would transform savings in these financial institutions to long term financial resources that would satisfy the financial needs of corporate firms, SMEs and individual investors.