The Financial Inclusiveness and Institutional Quality in Nigeria
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The study examines the role of institutional quality on financial inclusion and broad-based productive growth variables employing the Bounds testing approach to co-integration and error correction model within an autoregressive distributed lag (ARDL) framework based on annual secondary time series data from 1998 to 2017.The results of the analysis showed that institutional quality had an overall significant effect on financial inclusion in Nigeria. While all the explanatory variables were found to exert a positive statistically significant effects on finance-inclusive growth link in Nigeria both in the short-run and the long-run, contrary to a-priori theoretical expectation, technology choice index was positively signed.This shows that while the effects of institutional quality could vary widely in an economy, institutional quality appears to be the dominant driving force behind both the broad-based financial systems and productive employment growth. We therefore recommend that institutional improvement beyond the present liberal democratic threshold is much needed to leverage on new technologies by providing innovative banking infrastructure that would effectively expand both physical and digital accesses to finance, and thereby comprehensively integrating millions of Nigerians into productive activities for optimal value-chain finance-growth inclusiveness. Moreover, given her resource human capital base, the adoption of an appropriate development strategy would help a great deal for lifting millions out of poverty, and sizably bridging the inequality gaps. These would address the protracted tripartite socio-economic problems of poverty, inequality and unemployment in line with Lin's growth identification and facilitation hypothesis.