The potential of digital financial services to enhance remittance flows, financial inclusion and economic growth

Abstract

This paper has discussed how digital financial services have potential in promoting remittance flows, financial inclusion, and economic growth in Nigeria. The study was based on Financial Intermediation Theory and Technology Acceptance Model, and the research design applied was cross-sectional survey with primary data gathering involving 137 respondents in Lagos and Abuja through purposive sampling. The descriptive statistics, correlation, and multiple regression methods were used to analyze the data. Results showed that the use of digital financial services has significant and positive impacts on financial inclusion, which explains a great deal of variance in the outcomes of financial inclusion. Remittance flows were also found to have great positive impact on financial inclusion by the recipients. The digital financial services and remittances had an independent positive effect on economic wellbeing, meaning that they are complementary, not substitutes. The paper has concluded that though digital platforms and remittances have the potential to be a transformative source of development, sustainable financial inclusion depends on strong institutional structures, increased digital networks, and increased financial literacy. The recommendations are the focus on rural expansion of digital infrastructure, the creation of meshed financial literacy programs, and the creation of integrated regulatory frameworks that bring digital financial services with remittance corridors to ensure that developmental potentials are maximized.