FINANCIAL INTERMEDIATION AND NIGERIAN ECONOMIC GROWTH
Authors:
Orenuga Babatunde & Oyedokun, Godwin Emmanuel
Abstract:
This study empirically examined the influence of financial intermediation on the economic growth in Nigeria, by using eight selected financial intermediaries in the category of international authorization in Nigeria. This study adopted an ex-post facto research design since data were collected from secondary sources through the World Bank Development indicator and the National Bureau of Statistics for the periods 2011 to 2020. Financial intermediation was measured by using bank deposits, loans, and bank liquidity reserves, whereas Nigerian economic growth was measured by Nigerian GDP. The study applied OLS in its analysis to ascertain the influence of financial intermediation on Nigeria economic growth. The outcomes of the report demonstrated that credit and government expenditure have enhanced Nigeria economic growth, while customers’ deposits and liquidity reserve did not enhance Nigeria economic growth. The research paper recommended that financial intermediaries should improve their support for micro, small and medium enterprises (MSME) and real sectors of the economy to enhance Nigeria economic growth. Regulatory authorities should formulate policies to encourage financial intermediaries to lower their lending rates to nurture the productive sector of the economy to do better. Nigeria government to provide basic infrastructures such as adequate electricity supplies, provision of enough security personnel, good road networks to help banks to minimize amounts spent on providing an alternative source of power and securities for their branches. The government needs to improve spending on capital expenditure rather than spending on recurrent expenditure to stimulate economic growth. Government should provide an enabling environment for its citizenry to embark on businesses that will stimulate economic growth.