Fraud, Financial Literacy and Financial Inclusion in Nigeria

Oladapo Fapetu; Pelumi Abdulmalik Adewumi; Foluso Ololade Oluwole

Fraud, Financial Literacy and Financial Inclusion in Nigeria

Abstract: This study however, examined how banking sector fraud shapes financial inclusion outcomes in Nigeria and the role of financial literacy. Secondary data sourced from the NDIC and Global Financial Indicators database underpins the empirical analysis focusing on 2010 to 2023 as its scope. The study utilised a two-stage hierarchical regression analysis. From the first regression, the total fraud cases are strongly negatively (coefficient of -0.1017 and a p-value of 0.0000) related to financial inclusion. The coefficients presented show that, though positive with a coefficient of 0.0479 with a p-value of 0.0482, the total amount involved bears a weak and significant effect on financial inclusion, whereas in the case of the total actual loss with a p-value of 0.6601 and a coefficient of -0.0117, it thus shows no significance. The second regression included financial literacy, which has a significant and positive effect with a coefficient of 0.2333 and a p-value of 0.0009 on financial inclusion. This reduces the negative impact of fraud because the coefficient for total fraud cases drops to -0.0871 with a p-value of 0.0011. Correspondingly, the coefficient of total amount involved rises 0.0712 with a p-value of 0.0136 implying that financial literacy may raise the positive impact of larger fraud amounts. Total actual loss remains insignificant. Evidence from this study underscores the critical function of financial literacy as a buffer against fraud's adverse influence on inclusion. The study recommends that deliberate financial literacy interventions should be prioritized, especially for vulnerable and underserved populations.

IJEBM Volume. 2, Issue 2 (2026)

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Fraud, Financial Literacy and Financial Inclusion in Nigeria