Financial inclusion and poverty reduction in Nigeria: the role of information and communication technology (ICT)

Abstract

Purpose

The study analyzed the moderating role of information and communication technology (ICT) in the financial inclusion–poverty nexus in Nigeria.

Design/methodology/approach

The study adopts a battery of econometric techniques such as the generalized method of moments and the fully modified OLS to control for heterogeneity and endogeneity issues in the poverty literature.

Findings

The results show that ICT (regardless of the measure of ICT adopted) moderates the impact of financial inclusion on poverty in Nigeria. Specifically, the result shows that ICT strengthens the effectiveness of financial inclusion to reduce poverty. In particular, the results show that in the presence of unanticipated macroeconomic shock, ICT can help to deepen financial inclusion, reduce the negative effects of an unanticipated shock and ameliorate poverty in Nigeria. That is, the vulnerability of the poor in Nigeria to unanticipated economic shocks can be reduced by expanding the use of ICT in the financial sector. The research and policy implications are discussed.

Originality/value

The study accounts for the impact of COVID-19.

Citation

Olaoye, O. and Zerihun, M.F. (2023), "Financial inclusion and poverty reduction in Nigeria: the role of information and communication technology (ICT)", African Journal of Economic and Management Studies, Vol. 14 No. 4, pp. 726-740. https://doi.org/10.1108/AJEMS-12-2022-0488