The Impact of Financial Inclusion on Mental Health

Ajefu, Joseph, Demir, Ayse and Haghpanahan, Houra (2020) The Impact of Financial Inclusion on Mental Health. SSM - Population Health, 11. p. 100630. ISSN 2352-8273

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Abstract

This paper examines the impact of financial inclusion on the mental health of heads of household in Nigeria. The study employed data from the 2015/2016 Nigerian General Household Survey (GHS), matched with georeferenced data concerning financial services obtained from the Insight2Impact (i2i) GIS interface. The results indicate that financial inclusion has a strong positive impact on mental health. The study used a robust instrumental variable method, in which a household’s distance from the nearest financial institution was used as the instrument for financial inclusion. In addition, it identified the potential channels through which financial inclusion can influence mental health, including: (1) food expenditure; (2) remittances; and (3) risk-coping mechanisms. The findings of this study reinforce growing evidence for the benefits of financial inclusion for alleviating depression symptoms.

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