FINANCIAL ACCESS AND LIVING STANDARD IN NIGERIA

The relationship between financial access and living standard is unidirectional, with better welfare driving higher financial inclusion. This study investigated the relationship between financial access and living standard in Nigeria, with a view to examining the effect of financial access on living standard, analysing trends and patterns and assessing the causal relationship between financial access and living standard. The data were annual time series data from 1986 to 2024, which were obtained from the World Development Indicator (WDI) and International Financial Statistics (IFS). Financial Intermediation theory served as the framework. Living standard was Proxied by Gross Domestic Per Capita (GDPPC), while financial access served as the main explanatory variable with employment rate, inflation rate, real interest rate and official exchange rate as control variables. Data were subjected to Descriptive Statistics, Trend analysis, Auto-Regressive Distributed Lag (ARDL) model and Granger Causality test analysis, using E-View. The results shows that financial access has a positive effect on living standard in both the short run and long run with (coefficients of 0.2989 and 3.4754). However, in both cases, the relationship is not statistically significant as the (probability values 0.5610 for the short run and 0.4826 for the long run). Granger causality revealed that financial access does not directly cause better living standards in Nigeria. The results highlights that financial access improves living standards in the long run, but its impact is not strong enough on its own without support from job creation and stable macroeconomic conditions.