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Financial Inclusion and Financial Performance of Listed Deposit Money Banks in Nigeria

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Abstract

This study investigated the relationship between financial inclusion and financial performance of deposit money banks in Nigeria. The study examined the impact of rural financing on the financial performance of Deposit Money Banks (DMBs) in Nigeria; investigated the influence of pricing of banking services on the financial performance of Deposit Money Banks in Nigeria; assessed how Small and Medium-sized Enterprises' (SMEs) financing affects the financial performance (FP) of Deposit Money Banks in Nigeria. The study employed ex-post facto and correlation research design with secondary data obtained from the Central Bank of Nigeria 2020 statistical bulletin and financial institutions of deposit money banks. The results indicated a positive and significant relationship between loans to customers, deposits by customers, bank branches, mobile banking, and agency banking on return on assets of deposit money banks. The study concluded that financial inclusion positively influences the level of financial performance of deposit money banks. On the basis of the conclusion, the paper recommended amongst others that the Central Bank of Nigeria (CBN) should redefine the loan accessibility supply as a tool for monetary policy by establishing an equilibrium level. This would allow the bank to make more funds available to deposit money banks so that they could improve their performance and increase the amount of loans they are issued. In addition, the study also recommends that the interest rate has a negative effect on the performance of deposit money banks, there is an urgent need for the government to impose restrictions on the cross-border flow of capital and also to make use of the relevant macroeconomic management tools to control loan accessibility in times of crisis in order to mitigate the effects of interest rate on the profitability of deposit money banks. This is because there is an urgent need for the government to do so because the interest rate has a negative effect on the financial performance of deposit money banks in the country

Suggested Citation

  • Emmanuel OYEDOKUN, Godwin & Moses ADEYEMI, Adewale & Akingbade ADEWUMI, Moyosore, 2023. "Financial Inclusion and Financial Performance of Listed Deposit Money Banks in Nigeria," Multidisciplinary Journal of Social Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 3(1), pages 135-151, June.
    • Handle: RePEc:ris:amjoss:0007
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