Dynamics Among Financial Inclusion, Monetary Policy and Poverty Reduction in Nigeria
[1]
Rufus Ajisafe, Department of Economics, Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria.
[2]
Toyin Anyakudo, Department of Economics, Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria.
[3]
Folorunsho Ajide, Department of Economics, Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria; Department of Technical and Research, Institute of Chartered Accountants of Nigeria, Annex Office, Lagos State, Nigeria.
[4]
Felix Akinkuotu, Department of Marketing, Federal Polytechnic, Ado Ekiti, Nigeria.
This study investigated the relationship among financial inclusion, monetary policy and poverty reduction in Nigeriausing impulse response and variance decomposition from vector autoregression (VAR) framework for the period of 1981-2015. The results of impulse response and variance decomposition revealed a strong relationship between poverty reduction and financial inclusion proxied by LASME compared to financial inclusion proxied by deposits of rural branches of deposit money banks (DRB), which was less significant in explaining variations in consumption per capita, a proxy to poverty reduction in Nigeria. The study concluded that high interest rate charged by deposits money banks hampered the access to loans and advances available for SMEs in Nigeria; and served as an impediment to poverty reduction as shown in the negative relationship between interest rate and poverty reduction. Finally, economic growth had not transcended to the poor in form of an improved standard of living by increasing the per capita consumption of the people. This is reflected in the negative relationship between economic growth proxied by gross domestic product and poverty reduction proxied by consumption per capita. The implications of the results were further discussed.
Impose Response, Variance Decomposition, Financial Inclusion, Poverty, Nigeria
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