Financial inclusion and financial stability: Survey of the Nigeria’s financial system

Abstract

Financial inclusion is gaining greater recognition in the present days often with government support. Nigeria launched the financial inclusion agenda in 2012 with the aim to reduce the number of unbanked populations to 20 percent by the year 2020, and at the same time reduce to barest minimum, the credit constrain face by firms in the economy. However, greater financial inclusion alters the behaviour of both consumers, firms and even the financial intermediaries in such a way that it can affects the stability of the financial system in totality. This study focused on this aspect. The result of the study found that greater financial inclusion is associated with financial instability. It therefore recommends that policy makers and regulators to synchronize effort in order to achieve greater financial inclusion while at the same time, minimising the inclusion-induced instability in the financial system.