Financial Inclusion And Household Financial Health In Nigeria: The Role Of Sociodemographic Factors

Abstract

This study investigates the socio-demographic determinants of financial inclusion and their impact on household financial health in Nigeria. Using data from the Enhanced Financial Inclusion and Innovation Survey (2023), logit regression models were employed to estimate the likelihood of households achieving financial health. The results reveal that financial inclusion has a negative and significant effect on household financial health, suggesting that access to financial services alone may expose households to debt burdens and financial stress when not accompanied by adequate literacy and support structures. Age exhibits a nonlinear effect, with younger and middle‑aged households facing greater challenges, while older households regain stability through accumulated wealth and financial experience. Ethnic differences are evident: Hausa households are more likely to experience improved financial health compared to Igbo households, while Yoruba households show weak positive effects. Income and education emerge as the strongest positive drivers of financial health, whereas urban households are less likely to achieve financial stability compared to rural households, reflecting the pressures of higher living costs and debt exposure. The study contributes to debates on inclusive finance and development by highlighting the complex and sometimes counterintuitive relationship between financial inclusion and household well-being. Policy recommendations emphasize the need for inclusive financial strategies that integrate literacy programs, affordable financial products, and debt management support, alongside interventions that address age, ethnic, and regional disparities to strengthen household resilience and advance progress toward the Sustainable Development Goals (SDGs).

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