International Journal of Research and Scientific Innovation (IJRSI) | Volume IX, Issue VI, June 2022 | ISSN 2321–2705

Impact of Financial Intermediation on Economic Growth in Nigeria

Innocent Odiniya Alhassan1, Willy Nelson Ogoja2, Ekadi Ebikiwenimo Hannah3, And Williams Blessing Nkemakonam4
^{1, 2}Lecturer Department of Accounting
School of Management Sciences, Federal Polytechnic, Ekowe, Bayelsa State
³Lecturer Department of Banking and Finance
School Of Management Sciences, Federal Polytechnic, Ekowe, Bayelsa State
⁴Federal Polytechnic Ekowe, Bayelsa State

Abstract: This study examined the impact of financial intermediation on economic growth in Nigeria. Secondary data was collected from Central Bank of Nigeria Statistical Bulletin and Financial statement. The specific objectives of the study were to; ascertain the impact of fixed deposit on economic growth in Nigeria, to determine the impact of savings on economic growth in Nigeria, to ascertain the impact of current account on economic growth in Nigeria, to determine the impact of deposit money banks credit on small scale enterprises on economic growth in Nigeria. The research design was ex-post facto research design, and the study used multiple regression analysis. The results revealed that fixed deposits do not have any significant impact on economic growth in Nigeria, Savings significantly impact economic growth in Nigeria, Current accounts has significant impact on economic growth in Nigeria, deposit money banks credit to small scale enterprises does not significantly impact on economic growth in Nigeria. Thus, we conclude that financial intermediation influenced economic growth positively and significantly in Nigeria. Recommendations were that banks should be more efficient in mobilizing and allocating funds to entrepreneurs in the real sector. The regulatory authorities should perpetually take measures to free the banking sectors to avoid any form of shock on the system.

Key words: Financial Intermediation, Economic Growth

I. INTRODUCION

The significance of economic growth is extremely prominent. Economic growth is one of the key objectives use to determine the state of the economy in terms of whole systems, especially with reference to the general levels of output and income and to the interrelations among sectors of the economy. Nations measure their economic upswing yearly using annual growth rate of the real gross domestic product as an instrument to test this economic objective. Nzotta (2014) posited that, one of the main objectives of sustained economy growth is to reduce poverty and increase the standard of living of its citizens. Economic growth takes place when people take resources and process them in ways that are more desirable.
Kimberly (2019) defined economic growth as an increase in the production of goods and services over a specific period of time. Economic growth creates more returns for businesses; as a result, stock prices rise. This gives companies capital to