Impact of Financial Inclusion on Poverty Reduction in Rural Areas of Gombe State, North East Nigeria

Financial inclusion is recognised as a key instrument of poverty reduction in developing economies, and its impact in conflict-affected and underserved North East Nigerian states such as Gombe warrants empirical investigation. This study investigates the impact of financial inclusion on poverty reduction in rural communities of Gombe State. A cross-sectional survey design was employed, and 300 rural households were selected from Gombe, Balanga, and Funakaye Local Government Areas through multi-stage cluster sampling. Financial inclusion was measured by access to savings accounts, credit facilities, insurance products, and payment services. Poverty was measured using the Multidimensional Poverty Index, incorporating income, education, and health dimensions. Binary logistic regression and descriptive statistics were used for data analysis. Results showed that access to formal savings accounts reduced the probability of multidimensional poverty by 31% (OR = 0.69, p < 0.01). Credit access reduced food expenditure poverty incidence significantly. Insurance product access had a modest but positive poverty reduction effect, limited by very low product penetration (6.3% of respondents). The study concludes that financial inclusion meaningfully reduces multidimensional poverty in rural Gombe State but that the breadth of inclusion across product types must be expanded beyond payment services. Recommendations include subsidised micro-insurance products tailored to agricultural and health risks facing rural households in the North East geopolitical zone. Keywords: financial inclusion, poverty reduction, rural communities, Gombe State, multidimensional poverty