The Impact of Digital Financial Services and Private Sector Credit on Real Sector Output in Nigeria

This study analyses the impact of Digital Financial Services and Private Sector Credit on Real Sector
Output in Nigeria. The economic variables used were volume of Automated Teller Machine
transactions, volume of Point-of-sale transactions, volume of web transfers, volume of mobile transfers,
Private sector credit and Money Supply. The study used time series data to analyse 56 quarters from
2010 to 2023 making use of secondary data obtained from the CBN annual statistical bulletin of 2023,
CBN money and credit statistics 2025 and CBN quarterly statistical bulletin of 2024Q4. The foundation
of this study was laid on the Schumpeter’s Theory of Economic Development and the Endogenous
Growth Theory which were used as the theoretical framework of this study. Using the Autoregressive
Distributed Lag (ARDL) Model and ARDL Bounds Test, cointegration was tested and the short and
long-run effects of Digital Financial Services and Private Sector Credit on Real Sector Output were
identified in this study. Based on the results, it can be said that in the short and long-run, Web transfers
have a negative and significant relationship with Real Sector Output in Nigeria. Private sector credit was
found to have a positive relationship with Real Sector Output in the short-run but insignificant in the
long-run, The study recommends improvement in electricity and other infrastructure that can improve
the ability of the financial sector to drive real sector growth.
Keywords: Digital financial services, web transfers, private sector credit, money supply, financial
inclusion