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Abstract
Nigeria’s level of financial inclusion has improved markedly in the last decade, yet a sizable segment of adults still operates outside the formal financial system. This research investigates the linkage between six indicators of digital financial services (DFS) and total financial inclusion in Nigeria between 2015 and 2025. Adopting an ex-post facto approach, the study employs annual secondary data drawn from the Central Bank of Nigeria (CBN), the Nigeria Inter-Bank Settlement System (NIBSS), Enhancing Financial Innovation and Access (EFInA) and the National Bureau of Statistics. Total financial inclusion is regressed on mobile money accounts, agent banking locations, internet penetration, Bank Verification Number (BVN) enrolment, NIP transaction value and point-of-sale (POS) terminals using simple linear regression. Findings show that all six regressors are positively associated with inclusion and statistically significant at the 5% level. BVN enrolment exhibits the highest explanatory power (R2 = 0.972) followed by agent locations (0.963), while POS terminals show the lowest (0.791). Over the study period the DFS indicators expanded between 2.4 and 60 times, compared with only 1.3 times for inclusion, and they are highly inter-correlated (pairwise r up to 0.99) such that their individual contributions cannot be separated in a joint model. The paper concludes that DFS represents a significant but not sufficient driver of inclusion and recommends an integrated identity framework, broader agent network, improved rural connectivity, and policy attention to depth of usage and digital literacy.
Keywords: digital financial services; financial inclusion; mobile money; agent banking; BVN; Nigeria
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