Financial Inclusion and Employment Generation: Empirical Evidence from Nigeria

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Published: 2021-12-13

Page: 714-729

Alwell Nteegah *

Department of Economics, University of Port Harcourt, Nigeria.

*Author to whom correspondence should be addressed.


The paper investigates the impact of financial inclusion on job creation (unemployment rate) in Nigeria over the period 1981 – 2019 using the ARDL method. The results show that in the short run, deposit penetration, credit penetration and domestic investment penetration negatively and significantly impacted on unemployment rate. This implies that these variables reduced unemployment and improved the wellbeing of Nigerians. Interest rate on credit also complies with theoretical expectation with positive sign which implies that it fuels unemployment while bank branch penetration has mix effect on employment rate. However, in the short run, financial inclusion was significant in explaining changes in unemployment rate in Nigeria. The long run result shows that only bank branch penetration retarded unemployment rate. Deposit penetration, credit penetration, domestic investment penetration and interest rate all had positive effect on unemployment which implies they stimulated joblessness in Nigeria over the period of this study. Also all the variables in the long run equation insignificantly impacted on unemployment level. Based on these results and findings, the paper concludes that financial inclusion has negative and significant effect on employment generation in Nigeria only in the short run. The paper also recommends: increase access to financial services through branch expansions to the rural communities and the expansion of credit to the working poor as a way of building more capacity for employment generation in Nigeria.

Keywords: Employment, credit penetration, deposit penetration, branch penetration domestic investment and interest rate

How to Cite

Nteegah, A. (2021). Financial Inclusion and Employment Generation: Empirical Evidence from Nigeria. Asian Journal of Economics, Finance and Management, 3(1), 714–729. Retrieved from


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