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Can the e-Naira foster financial inclusion in Nigeria? Evidence from structural equation model

Author

Listed:
  • Usenobong Akpan

    (Central Bank of Nigeria, Research Department)

  • Aminu Umaru

    (Central Bank of Nigeria, Research Department)

Abstract

In this paper, we evaluate the extent to which the e-Naira can bridge the financial inclusion gap in Nigeria. From a survey design of a well-structured questionnaire, we subject the field dataset to the structural equation model (SEM), which combines factor analysis with multiple regression. The choice of SEM also follows from its capacity to handle complex and difficult data that may be non-normal and incomplete. Our results indicate that enhancing access to, quality of, and usage of the e-Naira could have a positive and significant influence on financial inclusion in Nigeria. In particular, we found that a unit increase in e-Naira’s access, usage, and quality could, respectively, lead to a 0.18%, 0.32%, and 0.38% increase in financial inclusion in Nigeria. The results were robust to various standard diagnostic tests. Consequently, the paper provides strong support for the need to further promote access, usage, and quality of the e-Naira in Nigeria as part of the strategies for enhancing financial inclusion in the country.

Suggested Citation

  • Usenobong Akpan & Aminu Umaru, 2025. "Can the e-Naira foster financial inclusion in Nigeria? Evidence from structural equation model," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 27(3), pages 863-881, December.
    • Handle: RePEc:spr:jsecdv:v:27:y:2025:i:3:d:10.1007_s40847-024-00407-8
    DOI: 10.1007/s40847-024-00407-8
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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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