Assessment of the Relationship Between Financial Inclusion and Economic Growth in North East Nigeria

Financial inclusion enables economic participation by the previously unbanked population, and examining its relationship with economic growth in the North East zone, which has the lowest financial access rates in Nigeria, provides evidence for inclusive growth policy. This study assessed the relationship between financial inclusion indicators and economic growth proxies in Borno, Yobe, Adamawa, Gombe, Bauchi, and Taraba States between 2016 and 2022. Secondary data on account ownership rates, mobile money usage, credit access, and state GDP proxy indicators were obtained from the Central Bank of Nigeria, EFInA, and NBS. Panel data regression using fixed effects was applied. Results showed that a one percentage point increase in mobile money account ownership was associated with a 0.34 percentage point increase in state-level economic activity proxy (p < 0.05). Formal savings account penetration showed a stronger growth association than credit access. The COVID-19 period saw mobile money usage surge by 47 percent, which correlated with reduced economic contraction. Financial inclusion was significantly lower in conflict-affected LGAs within Borno and Yobe States. The study concludes that financial inclusion positively supports economic growth in the North East zone. Recommendations include CBN expanding agent banking networks in rural North East LGAs, incentivising mobile network operators to improve connectivity for financial services, and integrating humanitarian cash transfer delivery through formal digital channels. Keywords: financial inclusion, economic growth, North East Nigeria, mobile money, panel data