Harnessing Digital Financial Services for Sustainable Poverty Alleviation in Nigeria

Abstract

This study explores how digital financial services, especially Automated teller machines (ATMs), have contributed to improving financial access and reducing sustainable poverty in Nigeria between 2009 and 2023. With many Nigerians lacking access to traditional banking, digital services present an opportunity to bring more people into the financial system and help alleviate poverty. The study uses specifically the Auto-Regressive Distributed Lag (ARDL) model and Error Correction Model (ECM), methods to evaluate how ATMs affect financial inclusion and poverty reduction. The findings reveal that each increase in ATM transactions leads to a 12% rise in financial inclusion and a 5% improvement in the Human Development Index. Despite these gains, challenges like unequal ATM distribution remain a barrier. The study suggests that better distribution of ATMs and educating users are key to enhancing the impact of digital financial services. Policymakers are encouraged to expand digital financial infrastructure in underserved regions, and future studies should look into the potential of new technologies, like blockchain, to further advance financial inclusion.