The moderating effect of financial inclusion on the relationship between mobile banking and economic growth in Nigeria

Abstract

This study examines the moderating effect of financial inclusion on the relationship between mobile banking and economic growth in Nigeria using time-series data from 2012 to 2025. Employing the Autoregressive Distributed Lag (ARDL) bounds-testing approach, the study analyzes short-run and long-run dynamics. The findings indicate that mobile banking has a positive and statistically significant effect on economic growth in the short run (β = 35.82, p = 0.016) and long run (β =501.19, p = 0.001). Financial inclusion also exhibits a positive and statistically significant effect on GDP in the short run (β = 30.74, p = 0.006) and long run (β = 526.89, p = 0.003). The interaction term between mobile banking and financial inclusion (MB_FI) is positive and statistically significant (β = 6.22, p = 0.012), indicating that financial inclusion strengthens the growth-enhancing effect of mobile banking. The error-correction coefficient is negative and statistically significant (-0.1308, p= 0.043); this result shows significant adjustment coefficient for convergence toward long-run equilibrium. Diagnostic tests indicate no evidence of heteroskedasticity or serial correlation, and the model is reported as stable. The study recommends investment in digital financial infrastructure, strengthened regulatory frameworks, expanded financial inclusion programmes, and improved digital literacy to enhance the contribution of mobile banking to inclusive economic growth in Nigeria.