Remittances and Financial Inclusion in Nigeria

Lydia Adeoye, Obafemi Awolowo University
George Agwu, Alex Ekwueme Federal University. Ndufu Alike.
Femi Awopegba, Nigerian Institute of Social and Economic Research

This paper investigates the impact of remittances on financial inclusion. The study particularly focuses on whether remittances promote the use of deposit accounts, using the 2009 World Bank’s Migration and Remittances Household Survey data for Nigeria, we conduct estimations of the likelihood of using deposit bank account controlling for household characteristics. The first assumption was that migration and financial inclusion are correlated only through unobservables and later included correlation due to endogenous migration variable. The instrumental variables recursive bivariate probit estimations reveal that remittances have a positive impact on financial inclusion by promoting the use of deposit accounts i.e. increases the probability of using bank account. Therefore, removing the barriers faced by recipients of remittances would further contribute in improving the financial sector.