Financial Leverage and Business Performance: An Analysis of Nigerian Stock Exchange Quoted Companies

Author: Omolola Oluwaseun Mercy, Adeadebayo Abdulkabir Shuaib, Adeniyi Sarafadeen Diran, Murtadho M. Alao

Abstract

The influence of financial inclusion on the financial performance of Nigerian Deposit Money Banks (DMBs) was investigated in this study. The 14 deposit money banks that were listed on the Nigerian Stock Exchange between 2011 and 2024 made up the study's population.; all 14 of the DMBs on the list were included in the study's sample size; secondary the statistics bulletin published by the Central Bank of Nigeria and the financial reports of the selected banks. The research used pricing and usage of DMB branches, rural financing, and banking services, micro, small, and medium-sized business financing, and return on assets (ROA) to quantify financial inclusion. The study's research design was ex post facto. The data was assessed using panel multiple regression analysis, and the Hausman specification test showed that the fixed effect model suited the data better than the random effect model. The model is good, as demonstrated by the results of an adequacy test on the residuals, which revealed that they were homoscedastic and free of serial correlation. According to the survey, the number of deposit money bank branches and rural financing had a statistically significant effect on DMB profitability in Nigeria. According to the study's findings, financial inclusion increases DMB profitability in Nigeria. According to the study's conclusions, DMBs should lend more money to micro, small, and medium-sized businesses and rural regions since doing so will boost their profitability in Nigeria