Digital Financial Inclusion and Commercial Banks Soundness in Nigeria
This dissertation investigated the relationship between digital financial inclusion and commercial banks soundness in Nigeria. Two multiple regression models were formulated to examine the effects of the independent variables on the dependent variables. Commercial banks soundness was measured by capital adequacy indicator and asset quality indicator. While financial technology was proxied by digital mobile money payment, digital Payment Service, digital Retail agents and digital backend server. Cross sectional data were sourced from financial statement and annual report of 14 quoted commercial banks in Nigeria while time series data were sourced from Central Bank of Nigeria Statistical Bulletin from 2015-2024. Panel data Ordinary least method was used. R-square, adjusted R-square, Durbin-Watson, F-statistics and probability, regression coefficient were used to analyzes the relationship financial technology and banking system soundness. Model one found that that 33 percent of the total variations in the capital adequacy ratio are accounted for, by the explanatory variables while the remainder is attributed to variable that is influenced by other factors not included in the regression model. The t-statistics shows that digital mobile money payment have negative effect on commercial banks capital adequacy, digital payment statistic have positive effect, digital retail agents have positive effect while digital backed serve have negative effect on commercial banks capital adequacy ratio over the periods covered in this study. Model two found that 52.6 percent of the total variations in the assets quality are accounted for, by the explanatory variables while the remainder is attributed to variable that is influenced by other factors not included in the regression model. The t-statistics shows that digital mobile money payment have negative effect on commercial banks assets quality indicator, digital payment statistic have positive effect, digital retail agents have positive effect while digital backed serve have negative effect on commercial banks assets quality indicator. The study concludes that digital financial inclusion does not explained significant variation in commercial bank soundness. We recommend that effort from the Central Bank of Nigeria should be strengthened to enhance digital financial inclusion in Nigeria.
Keywords: Digital Mobile Money Payment, Financial Inclusion, Digital Payment Service, Commercial Banks, Soundness, Nigeria
