Institutional Financing and Poverty Alleviation in Nigeria
Abstract
The study examined the nexus between Institutional Financing and the Poverty rate in Nigeria. The rationale behind the study is to establish the extent to which disbursed credits from the selected financial institutions have helped in alleviating the poverty rate in Nigeria. The institutional credits considered in this study include credits from the Bank of Industry, Bank of Agriculture, Microfinance Bank, African Development Bank, World Bank, and Deposit Money Bank while Poverty Index was used as a measure of the poverty rate. The study covered the periods 1991 to 2021 and data was sourced from the World Bank Database. We employed Unit Root Test, Johansen Co-Integration Test, Vector Error Correction Model, and Granger Causality Test. In the long run, we found that Microfinance Bank credit and African Development Bank credit significantly contributed to the poverty alleviation agenda of the government in Nigeria. As such, we conclude that institutional credits from Microfinance Bank and African Development Bank have significantly contributed to the fight against the poverty rate in Nigeria. As such, we recommended that Microfinance Bank should maintain its credit disbursement pattern as the report has shown that its credit has helped to assuage the poverty rate in Nigeria. Doing this is necessary as it will help in including the financially excluded citizens of the country in the financial web and also increase their access to financial products.
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