MICROFINANCE INSTITUTIONS AND FINANCIAL INCLUSION IN NIGERIA

Abstract

Microfinance institutions' effects on financial inclusion in Nigeria from 1995 to 2024 are the focus
of this research. This investigation made use of an ex-post facto research strategy. This research
makes use of secondary sources, including the Statistical Bulletin, 2024, published by the Central
Bank of Nigeria. As a proxy for financial inclusion, the study looks at total savings with
microfinance banks in Nigeria as the dependent variable. As explanatory variables, it uses total
assets, total number of microfinance banks, and total credit as variables for microfinance banks.
Using Ordinary Least Square econometric approaches, hypotheses are developed and evaluated.
Microfinance institutions' total assets significantly affect the total number of savings accounts in
Nigeria, according to the results. When it comes to Nigerians' overall savings with microfinance
banks, the sheer quantity of these organizations doesn't matter. The overall number of savings
accounts in Nigeria are significantly and negatively affected by microfinance bank credits. Based
on these findings, it is recommended that lawmakers and financial institutions work towards
increasing the total assets of microfinance banks (TMBAS), as this will have a significant effect on
total savings. This will help microfinance institutions in Nigeria improve savings mobilization,
financial inclusion, and economic stability. Methods such as increasing funding, expanding product
lines, and improving risk management can accomplish this. Second, we should not rest until we
improve the performance of the few microfinance institutions (TNMB) that do exist, so that they
can better assist those who have savings.