From Digital Access to Human Development: Examining the Role of Financial Inclusion in Nigeria

Abstract

This study examined the effect of digital financial inclusion on sustainable development in Nigeria from 2010 to 2023 using the Human Development Index (HDI) as a proxy for sustainable development. Specifically, the study investigated the influence of Automated Teller Machine (ATM) usage, Point of Sale (POS) terminal transactions, and mobile banking on human development outcomes. Anchored on Financial Intermediation Theory and the Diffusion of Innovations Theory, the study employed secondary data obtained from the Central Bank of Nigeria Statistical Bulletin and the United Nations Human Development Reports. An ex-post facto research design was adopted, while the Autoregressive Distributed Lag (ARDL) model was used for data analysis after conducting descriptive statistics and unit root tests. The findings revealed that ATM usage and POS terminal transactions exerted negative but statistically insignificant effects on the Human Development Index, while mobile banking exhibited a positive but insignificant relationship with HDI during the study period. These results suggest that although digital financial services have expanded access to financial products, their contribution to sustainable human development remains limited due to shallow utilization and inadequate integration into welfare-enhancing economic activities. The study concludes that digital financial inclusion alone is insufficient to drive sustainable development unless complemented by policies that promote productive usage, digital literacy, financial innovation, and inclusive infrastructure. Accordingly, it recommends strengthening digital financial ecosystems, expanding financial education programmes, and integrating digital financial services into broader national development strategies to improve human development outcomes in Nigeria.