Examining the Nexus Between Financial Inclusion, Entrepreneurship, and Poverty Reduction in North West Nigeria

Financial inclusion, entrepreneurship, and poverty reduction form an interconnected nexus in development policy, yet the empirical nature of these relationships in Nigeria's North West geopolitical zone remains poorly documented at the micro level. This study examined this nexus through a household survey of 450 respondents in Kano, Sokoto, and Kebbi States, covering both financial inclusion service users and non-users. Financial inclusion was measured by access to formal savings, credit, insurance, and digital payments. Entrepreneurship was measured by self-employment status, business ownership, and recent business creation activity. Poverty was assessed using a multidimensional poverty index adapted from the UNDP MPI, covering income, education, health, and assets dimensions. Path analysis and structural equation modelling were employed. Results showed that financial inclusion directly reduced poverty (coefficient = -0.37, p < 0.001) and indirectly through entrepreneurship stimulation (mediated path coefficient = -0.14). The financial inclusion-entrepreneurship-poverty reduction pathway was stronger for women than men (gender interaction significant at p < 0.05). Digital payment inclusion had the largest poverty reduction effect among inclusion dimensions (direct effect = -0.29, p < 0.001). Credit access was the most entrepreneurship-enabling dimension (direct effect on entrepreneurship = 0.41, p < 0.001). The study fills an empirical gap in the North West zone by quantifying the financial inclusion-entrepreneurship-poverty pathway and recommends targeted mobile banking and microcredit expansion programmes for the region. Keywords: financial inclusion, entrepreneurship, poverty reduction, North West Nigeria, multidimensional poverty