Financial Development and Poverty Alleviation in Nigeria

Abstract

Poverty is a global phenomenon that appears to becoming almost increasingly insurmountable which perhaps qualifies it to be one of the 17 SDGs Agenda of the UN targeted to have been fully tackled by the year 2030. Nigeria is one of the nations that has been worst hit by poverty and has been recently declared as the “world poverty capital’ which could be partly traceable to low level of financial development typical of many developing nations.  This study thus, examines financial development and poverty alleviation in Nigeria from 1981 to 2020. The results show that although banking channel as indicated by financial deepening, and access to credit promotes poverty alleviation, its strength is not strong enough to create any substantial poverty reduction in Nigeria. The development of the capital market on the other hand through increase in market size as reflected by growth in market capitalisation and increase in shareholders wealth promotes poverty alleviation in Nigeria. It is therefore recommended that the monetary authority and government should pursue all-inclusive banking sector development programmes that will create financial access for the grass root, rural poor and the informal sector .The Nigerian Exchange and Securities and Exchange Commission are also encouraged to create veritable platforms and products that will attract the poor and low income earners to the capital market to stem the poverty trend in Nigeria.