Financial Decision and Poverty Nexus in Nigeria
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The study examines the relationship between poverty and financial decision in Nigeria so as to ascertain
if poverty has an impact on the quality of financial decisions taken by the poor and financially vulnerable
individuals. The study utilised a unique methodology (truncated regression) and applied a survey data
from the Afrobarometer dataset to investigate the quality of loan usage among the extreme poor in
Nigeria. We allowed for the inclusion of other policy relevant variables that may likely inform the direction
of new generation poverty alleviation policies like gender, education and age of the individuals. We find
that the extremely poor group use more of the loans for other non-developmental issues like funeral and
marriage celebrations than for productive and poverty alleviating ventures. However, the younger males
engage more in this act than the females. Also, as the poor become more educated, they are able to use
more of the loan for development-oriented investments like purchase of assets, building houses and even
furthering their education. A major policy implication of this result is that loans should be directed towards
younger individuals, and education should be a focal priority in selecting who to fund.
Keywords
H Social Sciences (General), HF5601 Accounting, HM Sociology