Thomas D. Ayodele

The aim of this study is to examine the effects of illiteracy and unemployment on financial inclusion in rural areas of Nigeria between 2017 and 2022. Most rural areas in developing countries have high illiteracy and unemployment rates, creating challenges for researchers to measure the inclusiveness of financial services and products. This study examined the effect of illiteracy and unemployment on the inclusiveness of financial services and products in rural areas of Nigeria. The ex-post facto research design, systematic sampling, dummy for latent variables (erratic power supply and insecurity in rural areas), and autoregressive distributed lag (ARDL) techniques were employed. The result showed that the coefficient estimate for the illiteracy rate is negative (-0.5318), indicating that higher illiteracy is associated with lower financial inclusiveness, and the coefficient estimate for unemployment rate is also negative (-2.1977) and statistically significant, suggesting that the higher unemployment rate is associated with financial inclusiveness. These findings indicate that a decline in the delivery of financial services in developing nations attest to illiteracy and unemployment. This study concluded that there is a need to improve education and employment rates in rural areas of developing countries to achieve optimal inclusiveness of financial services and products.