Journal of Economics and International Finance
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Article Number - 73E67DD41532


Vol.5(8), pp. 318-326 , November 2013
DOI: 10.5897/JEIF2013.0541
ISSN: 2006-9812



Full Length Research Paper

The impact of financial inclusion on monetary policy in Nigeria


Mbutor O. Mbutor* and Ibrahim A. Uba




Research Department, Central Bank of Nigeria, Nigeria.


Email: mbukor@yahoo.co.uk






 Accepted: 14 October 2013  Published: 30 November 2013

Copyright © 2013 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0


Financial inclusion is currently hot topic in policy spheres because of its potency in encouraging economic growth. And because it improves the sensitivity of aggregate demand to interest rate it has been argued to be useful for the success of monetary policy. However, little attention has been devoted to computing the exact effect of financial inclusion on monetary policy. This paper presents a simple model showing the impact of financial inclusion on monetary policy in Nigeria between 1980 and 2012. The result of the study supports the notion that growing financial inclusion would improve the effectiveness of monetary policy. However, the coefficient of the number of bank branches has the wrong sign and this is explained by the fact that, in opening branches, banks mainly pursue profits but not financial inclusion which is a policy objective, so that there are clusters of branches which are under-utilized while numerous locations which are considered not favourable for balance sheets are under-branched. 

Key words: Financial inclusion, monetary policy, economic.


APA (2013). The impact of financial inclusion on monetary policy in Nigeria. Journal of Economics and International Finance, 5(8), 318-326.
Chicago Mbutor O. Mbutor and Ibrahim A. Uba. "The impact of financial inclusion on monetary policy in Nigeria." Journal of Economics and International Finance 5, no. 8 (2013): 318-326.
MLA Mbutor O. Mbutor and Ibrahim A. Uba. "The impact of financial inclusion on monetary policy in Nigeria." Journal of Economics and International Finance 5.8 (2013): 318-326.
   
DOI 10.5897/JEIF2013.0541
URL http://academicjournals.org/journal/JEIF/article-abstract/73E67DD41532

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