IMPACT OF FINANCIAL INTERMEDIATION ACTIVITIES ON ECONOMIC OUTPUTS IN NIGERIA, 1981-2021
Abstract
Research purpose: The study examines the impact of financial intermediation activities on economic outputs in Nigeria, 1981-2021. Specifically the study was to: measure the impact of total domestic credit to private sector on Gross domestic product in Nigeria, determine the impact of total commercial bank loans and advances on Gross domestic product in Nigeria. Investigate the impact of total insurance income on Gross domestic product in Nigeria, find out the impact of total annual stock market capitalization on Gross domestic product in Nigeria.
Design/methodology/approach: A special type of model that is superior to ordinary least square called Auto regressive distributed lag (ARDL) model was used for this study.
Findings: Result reveals that Total domestic credit to private sector positively and non-significantly impacted on real Gross domestic product in Nigeria within the period of the study. Total commercial bank loan and advances positively and significantly impacted on real Gross domestic product in Nigeria within the period of the study. Total insurance premium income positively and non-significantly impacted on real Gross domestic product in Nigeria within the period of the study.
Implication: The study concludes that banking intermediation series exert more positive influence on the Nigeria economy than insurance and capital market intermediation as used in the context of this study.
Originality/value added: Government should aggressively embank on providing credit to private sectors or small and medium enterprise to improve productivity and economic growth and adequate management of commercial bank loan through sectional means so as to ensure that such loan reach the targeted audience which will be encouraged to enhance improvement on economic performance in Nigeria
