Matthew Jesse Kromtit, Rose Ifeoma Umejiaku

(Department of Economics, University Jos, Nigeria)

 

 

Abstract: Financial systems all over the world play fundamental roles in the growth and development of the economy, particularly through enhancing the financial intermediation between the deficit and surplus units in the economy. The Nigerian money market and its institutions as a segment of the financial system have received the attention of the government and its agencies over the years since 2004 to improve the access to finance by investors in the country. This forms the motivation for the study which aims at unveiling the implications of the deepening of the Nigerian money market for financial inclusion in the country in recent times. By using qualitative and descriptive methods of analyses, the study reveals that the Nigerian money market has not yet deepened enough to meet the financial inclusion target in the country; low and irregular income; inadequate physical access to deposit money banks especially in rural areas; financial illiteracy, ineligibility and affordability; lack of knowledge and awareness of modern technology and poor interest rates management are serious impediments to financial inclusion in Nigeria. The study recommends among others a complete overhaul of the financial infrastructure, especially in the rural areas to attract the informal servers of financial services into the formal financial sector; the regulation of policies on financial inclusion that focus on the distribution channels of financial services and retail agent banking are necessary to increase access to finance; a massive enlightenment campaign on financial products and payment techniques is vital to increase patronage and the need to properly monitor the interest rates of banks is important to ensure that they do not unnecessarily charge high rates that are inimical to borrowing by investors as the investment climate dictates. The policy makers should therefore work towards providing an environment where all stakeholders can perform the functions they do best and they should work with clarity and consistency and speed up the process of moving towards greater openness and greater certainty in the electronic payment/identification sphere.

 

 

Key words: money market deepening; financial inclusion; Nigeria

 

JEL codes: E43, E51, E52, E58, G2, O4