Impact of Digital Financial Inclusion on Poverty Reduction and Economic Empowerment in Nigeria

Abstract

The study examined the effects of digital financial inclusion on poverty alleviation and economic empowerment in Nigeria. Specifically, it assessed whether digital payment penetration, mobile money use, access to digital financial services, and digital banking adoption help reduce poverty. The study employed an ex post facto research design, a quantitative approach, and secondary time-series data. Within an Autoregressive Distributed Lag (ARDL) framework, it conducted unit root tests, ARDL bounds cointegration testing, an Error Correction Model (ECM), and diagnostic tests. The results reveal a long-term relationship between digital financial inclusion and poverty alleviation. Digital payment penetration and digital banking adoption have positive and statistically significant effects on poverty alleviation, while mobile money use and access to digital financial services have positive but statistically insignificant effects. The findings suggest that digital financial inclusion can promote poverty alleviation when supported by effective digital infrastructure and financial capability. The study recommends greater investment in digital payment systems and digital banking platforms, improved technological literacy, and policies that expand affordable access to digital financial services to strengthen economic empowerment and achieve sustainable poverty reduction in Nigeria.