“Do illiteracy and unemployment affect financial inclusion in the rural areas of developing countries?
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Date
2023-04-15
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Investment Management and Financial Innovations
Abstract
The aim of this study is to examine the effects of illiteracy and unemployment on financial
inclusion in rural areas of Nigeria between 2017 and 2022. Most rural areas in developing
countries have high illiteracy and unemployment rates, creating challenges for research ers to measure the inclusiveness of financial services and products. This study examined
the effect of illiteracy and unemployment on the inclusiveness of financial services and
products in rural areas of Nigeria. The ex-post facto research design, systematic sampling,
dummy for latent variables (erratic power supply and insecurity in rural areas), and autoregressive distributed lag (ARDL) techniques were employed. The result showed that
the coefficient estimate for the illiteracy rate is negative (-0.5318), indicating that higher
illiteracy is associated with lower financial inclusiveness, and the coefficient estimate for
unemployment rate is also negative (-2.1977) and statistically significant, suggesting that
the higher unemployment rate is associated with financial inclusiveness. These findings
indicate that a decline in the delivery of financial services in developing nations attest to
illiteracy and unemployment. This study concluded that there is a need to improve edu cation and employment rates in rural areas of developing countries to achieve optimal
inclusiveness of financial services and products.
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Citation
Tega H. Williams, Grace O. Iriobe, Thomas D. Ayodele, Sunday F. Olasupo and Michael O. Aladejebi (2023). Do illiteracy and unemployment affect financial inclusion in the rural areas of developing countries?. Investment Management and Financial Innovations, 20(2), 89-101. doi:10.21511/imfi.20(2).2023.08