IMPACT OF FINANCIAL INCLUSION ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

This study examines impact of financial inclusion on financial performance of Deposit Money Banks (DMBs) in Nigeria. The Study measures financial inclusion with Micro, Small and Medium Enterprises (MSMEs) Financial, Rural Financial, Number of branches of DMBs, Pricing and Usage of Banking services, while financial performance (FP) is measured with return on assets. The study utilizes expose facto research design and data were collected from secondary sources obtained from the Central Bank of Nigeria (CBN) Statistical Bulletins and Financial reports of the National Deposit Insurance Corporation (NDIC) for the period of 1982-2016. Ordinary least square regression model, with the aid of Autoregressive Distributed Lag Error Correction Method, was used to analyze the data. The stationarity property of the time series variables were found to be stationary at levels and first difference. The study finds that MSMEs financing has a significant positive impact on financial performance DMBs in Nigeria. while rural financing, Pricing of Banking services, number of bank branches and usage of banking services have no significant impact on the financial performance of DMBs in Nigeria. The study concludes that MSMEs financing as measures of financial inclusion improves financial performance of deposit money banks in Nigeria. The Study recommends that DMBs should increase the amount of loan and advances given to MSMEs as this will strengthen financial performance of DMBs in Nigeria. CBN and NDIC should also encourage DMBs through their regulatory and supervisory functions to give priority to SMEs financing in Nigeria.