The Impact of Financial Intermediation on Economic Growth: The Nigerian Perspective

Abstract

The Paper examines the empirical relationship between the level of development by financial intermediaries and economic growth in Nigeria. I trace the origin of trade from the primitive barter system to its evolution through money to the dominant economic system of capitalism and the role of financial intermediation in such a system. I use data of aggregate deposit money bank credit over time and Nigerias corresponding GDP to establish that a moderate positive relationship exist between these variables in Nigeria to backup the various literatures on this topic. I conclude by advising of the potentials and the need to develop institutions engaged in financial intermediation in Nigeria and her factors of production which is in line the present Goverment economic agend via NEEDS.