FINANCIAL INTERMEDIATION AND ECONOMIC GROWTH IN NIGERIA
Abstract
This study examined the relationship between financial inclusion and economic growth in Nigeria from 2004Q1 to 2022Q4. Specifically, the study evaluated how Nigeria’s economic growth is been influenced by aggregate savings, aggregate credits to the private sector, and financial inclusion. The study was hinged on the neoclassical theory of economic growth. The study estimation was based on the autoregressive distributed lag (ARDL) model. The result of the study showed that from 2004Q1 to 2022Q4, Nigeria's economic growth was significantly impacted adversely by savings, while aggregate bank credit to the private sector had a non-significant positive effect. Additionally, financial inclusion had a non-significant negative effect on economic growth. The study therefore suggests that aggregate savings negatively impact economic growth, requiring macroeconomic stability, particularly inflation, to ensure full benefits. It also recommends reviewing monetary policies that impede credit flows into the economy and pursuing strategic financial inclusion policies to integrate the informal sector into the financial landscape. The Central Bank of Nigeria should also review its monetary policies to ensure full benefits from savings.