IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 10 NO. 2 2025
DOI: 10.56201/ijefm.v10.no2.2025.pg156.178

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Financial Intermediation and Economic Growth: The Banking Function Perspective in Nigeria

Obodo Chinenye Longinus, Gabriel Queen Ibim

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Abstract

The study examine the effect of financial intermediation on the growth of Nigerian economy from 1990 – 2023. The main objective is to investigate the relationship between financial intermediation and Nigerian economy growth while the specific objectives are to examine the effect of commercial banks credit, deposit, investment and credit to Small and Medium Scale Enterprises. Time series data were sourced from Central Bank of Nigeria Statistical Bulletin. The study model Real Gross Domestic Product as the function of Total Commercial Bank Credit, Total Commercial Bank Deposit, Total Commercial Bank investment and Total credit to Small and medium Scale Enterprises. Multiple regressions with econometrics view statistical package were used as data analysis techniques. ?-coefficient, R-square, F-statistics and Augmented Dickey fuller Unit Root Test were used to examine the relationship between the variables. Findings revealed that the independent variables in the model have positive effect on the dependent variable. The study concludes that there is positive and significant relationship between financial intermediation and the growth of Nigerian economy. It therefore recommends that policies should be devise and the existing ones reformed to enhance the operational efficiency of the commercial banks for effective intermediation that will facilitate the realization of monetary and macroeconomic goals of economic growth in Nigeria.

Financial Intermediation, Economic Growth, Banking Function Perspective, Nigeria

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