Financial Inclusion in the Digital Age, its Role and Impact on Economic Growth

Abstract

Globally, Financial Inclusion (FI) and Digital Financial Services (DFS) have become a life-blood and key driver of socio-economic growth and development on the backdrop that economies are dependent on financial services to attain advancement. The paper explored the role of Mobile Money Services (MMS), also known as DFS in enhancing access to financial services. The research was driven by the increasing mobile network spread, the under-served, ubiquity/ penetration of mobile devices amongst both the poor and low-income earners, factors affecting FI, fees which are disincentive to users, introduction of cashless Nigeria by the Central Bank of Nigeria as well as the emergence of Mobile Money Services in 2009. An in-depth analysis of MMS in driving FI and paradigm shift in traditional payment systems was embarked on and focused on issues associated with services provided MMS Operators viz transaction fees, transaction value and count; stakeholders within the ecosystem, user experience and security of funds, policy and regulation on financial services delivery as well as inclusive participation of the government, regulatory bodies and infrastructure providers. The findings showed that while the MMS have a huge potential to drive DFS in Nigeria, it would require deliberate actions by all stakeholders to establish an appropriate solution capable of transforming the economy and also the contribution of MMS to FI in reducing the financially excluded is critical to the nation. Advancing this therefore, the government and other critical stakeholders would need to create a framework that will enhance access to financial services.