Digital Financial Inclusion and Financial Performance of Selected Money Deposit Banks in Nigeria

Abstract

The re-launch of Digital Financial inclusion in 2012 by the central bank of Nigeria has made
Nigerian banks to embrace several innovative ideas towards providing better quality services
to their customers. These innovations are expected to impact on the performance of the banks
as suggested by theoretical literature. This study is therefore conducted to provide some
empirical explanation on the impact of Digital Financial inclusion instruments on performance
of Nigerian banks. Data were collected from World Bank database, Central Bank of Nigeria
Statistical Bulletin, and annual reports of deposit money banks. The data were analysed with
Fixed Effect Regression Model. The Regression analysis was conducted after conducting the
Breusch-Pagan Lagragian Multiplier (BP-LM) test to determine the suitability of either the
fixed effect or random effect model. The findings revealed positive and significant impact of
Automated Teller Machines, Bank embranchment, and point of sale terminals on bank
performance at both 1% and 5% levels of significance. However, the result on the number of
bank account is not significant. The study concludes that improvement in the quality of
financial services will attract more customers to the bank and boost their performance. It is thus
recommended that more ATMs, POS and Branches be put in place for better inclusive finance.