Financial Deepening and Poverty Reduction in Nigeria’s North East Zone

Financial deepening, defined as the expansion in the variety, volume, and accessibility of financial services relative to economic output, is widely regarded as a prerequisite for sustained poverty reduction in developing economies. This study examines the relationship between financial deepening indicators and poverty reduction in Nigeria's North East geopolitical zone, comprising Adamawa, Bauchi, Borno, Gombe, Taraba, and Yobe States. Using secondary data from the National Bureau of Statistics, the Central Bank of Nigeria, and the National Financial Inclusion Strategy reports for the period 2015 to 2023, the study employs a panel regression framework to assess whether the expansion of bank branches, mobile money agents, and credit volumes is associated with measurable reductions in poverty rates and improvements in human development indicators. The theoretical basis draws on the McKinnon-Shaw financial liberalisation thesis and the financial inclusion-poverty nexus literature. The North East zone presents a particularly compelling research context due to the security disruptions caused by insurgency in Borno and surrounding states, which have severely limited both formal financial infrastructure and household income stability. The study evaluates whether digital financial services have partially compensated for the reduced physical banking presence in conflict-affected areas. Existing literature from comparable fragile-state contexts suggests that mobile money serves as a resilience tool rather than a development accelerator in high-insecurity environments. Findings are intended for the North East Development Commission, the Central Bank of Nigeria, and international development partners working in the zone. Keywords: financial deepening, poverty reduction, North East Nigeria, financial inclusion, mobile banking