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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Article
Impact of Financial Intermediation on Economic Growth of Nigeria (1995-2014)
Author(s)
Okoro Okoro E. U., Onodugo Ifeanyi Chris, Benjamin A. Amujiri
Chinedu Okeke
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DOI:10.17265/2328-2185/2018.06.012
Affiliation(s)
University of Nigeria, Nsukka, Nigeria
Zenith Bank, Abuja, Nigeria
ABSTRACT
The problems of lack of efficiency and effectiveness of mobilizing resources
lead to unemployment, instability, and underdevelopment of the Nigeria economy. Financial
intermediation as a financial system aims at the enhancement of mobilization of
funds by pooling individuals savings and increasing the proportion of societal resources
devoted to interest—yielding assets and long-term
investments, which in turn facilitates economic growth. This study is aimed at accessing the impact of financial
intermediation on economic development in Nigeria by using the endogenous components
of financial intermediation, such as demand deposits
(DD), time/savings deposits (T/Sav), and credits (loans and overdraft), our independent variables as explanatory
variables to predict the outcome of our dependent variable output (GDP) secondary
data from the CBN (Central Bank of
Nigeria) Statistical Bulletin of various issues. The study covers an eight-year period (1995-2014). Parametric statistics in forms of analysis of variance (ANOVA), mean, standard deviation, t-test, co-efficient of correlation, and simple linear regression were used to analyze the
data. The findings suggest that though there exists a positive growth relationship between financial intermediation
and output in Nigeria, there also exist elements of negative short-run growth relationship,
especially for the periods that suffered financial shocks resulting from the global
financial crisis and perhaps numerous bank failures. Recommendation states that this finding may serve to buttress existing
research outcomes and will be relevant to regulatory authorities in formulating
policies that are capable of positively enhancing financial intermediation and output
growth in the economy.
KEYWORDS
financial intermediation, banking, Nigeria
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