The study investigate the relationship between economic growth gdp and some financial deepening indicators money supply and credit to private sector, using a data obtained from the central bank of nigeria cbn statistical bulletin for the period 19812012. Financial deepening and economic growth in nigeria economics. Economic theory suggests that the financial sector of any. In addition, the competitiveness that resulted from the entry of new banks into the financial system and the liberalization of interest rates brought about a sharp rise in nominal deposit and lending rates. Religious challenges of islamic banking in nigeria. Pdf financial deepening and economic development of nigeria. Modeling the financial deepening of the nigeria capital market ncm 3. The study conducted a granger causality test for a period of 22 years. Impact of financial sector development on nigeria economic.
This means that it is financial deepening that leads to. Effect of financial sector development on manufacturing output growth in nigeria 19862012. The two views appear to be in conflict with each other revealing opposing patterns of the relationship between financial deepening and economic growth. Financial deepening and economic growth in nigeria. The depth of the financial sector has generally been found to onomic growth. Onwumere 2 and ezeaku hillary chijindu 1 1department of banking and finance, caritas university, enugu, nigeria.
For instance, financial deepening as indicated by ratio of broad. A developed financial sector is a major tools for developing an economy. The impact of financial deepening on domestic investment. Impact of financial sector development on nigeria economic growth. The study used the phillipsperon test for unit root to ascertain whether the variables are stationary or not. Pdf the influence of financial sector development and. The study concludes that financial deepening has an impact on economic growth in nigeria. Financial sector plays a crucial role in economic development. Effect of financial sector development on manufacturing. Financial deepening can have an effect on both individuals and societies economic situations.
The data were sourced from the central bank of nigeria statistical bulletin and the national bureau of statistics. The effect of financial deepening on economic growth in. The causality result showed no causality between financial deepening variable, economic growth, and growth volatility but a unidirectional causality between exchange rate volatility, stock traded, stock market capitalization, and broad money. Financial deepening is a term used by economists to refer to increasing provision of financial services. Pdf the objective of this study is to determine the impact of financial deepening on economic growth in nigeria. Barr 2005 provides other reasons to view financial development through the lens of microfinance. A model of financial deepening the model from kiyotaki and moore 2004 is of a deterministic, discretetime production economy with a single homogeneous good, corn, which can be stored oneforone. Abstract the study investigatesthe impact offinancial deepening on economic growth in nigeria. Gabriel department of economics, obafemi awolowo university, ileife, nigeria. Essays on the role of microfinance institutions in financial deepening, economic growth and development this dissertation is composed of three essays which examine how access to credit, namely micro credit, impacts economic outcomes at the household and village level in bangladesh. The study examines the causal relationship between financial deepening and economic. Pdf financial deepening and entrepreneurial growth in nigeria.
The rolling estimation with fixed window size is used and granger noncausality test is applied on rolling subsamples of the data. The study examined the influence of financial sector development, financial deepening on economic growth. It focused on the impact of stock market and bank deepening variables such as money supply, market capitalization, private sector credit and financial savings. This means that it is financial deepening that leads to growth and not growth.
However, evidences from the same study suggest that financial deepening in nigeria is weak given the magnitude of the countrys overall economic activities. Capital market, financial deepening and economic growth in kenya by rose ngugi, daniel amanja and isaya maana. This research work examines financial deepening and economic growth in nigeria from 1985 to 2014. It focused on the impact of stock market and bank deepening variables such as money. Financial deepening and the performance of manufacturing. Financial deepening and financial inclusion activities have also resulted in a decline in domestic capital. According to central bank of nigeria 1993, the financial system refers to the. This study sought to investigate the effects of financial deepening on economic growth in the kenyan banking sector. This paper examines the effects of financial inclusion on the economic growth of nigeria 19822012. This study investigated the effect of financial deepening on the performance of manufacturing firms in nigeria from 1970 to 2016.
A vector autoregressive var cointegration and vector. This empirical study examined financial deepening and economic. The project is comprehensive and contained detailed analysis of nigeria financial sector development. The central focus is that a high level of financial deepening is a necessary condition. Lastly, financial deepening has no direct significant impact on aggregate welfare, but can go through the financial accessibility indicatorbank branch distribution. The impact of financial deepening on economic growth.
Pdf financial deepening indicators and economic growth. Effects of financial deepening on economic growth of nigeria 19812016. The study employed the conventional augmented dickey fuller test to test for stationarity among the three variables gdp, money supply. Pdf financial deepening and economic development of. Pdf financial deepening indicators and economic growth in. Overview and macro financial environment may 2000 financial sector unit economic management and social policy department africa region document of the world bank. Majority nigerias citizens are living below the poverty line mainly due to the problem of financial inclusion. Financial deepening and economic growth nexus in nigeria mdpi. Financial deepening and manufacturing sector performance. December 2, 2014 assessing the impact of financial inclusion policies on deepening financial inclusion in nigeria. Therefore, financial deepening is a precondition for economic growth 11. An analysis of financial deepening in the nigerian financial sector in the dynamics of managing the nigeria financial system in the 21st century cbn. To ensure robustness against sample size, stationarity and.
The effect of financial deepening on economic growth in nigeria. Abstract this research work examines financial deepening and economic growth in nigeria from 1985 to 2014. Nzotta and okereke 2009 estimated the determinants of financial deepening in nigeria. The excessive use of cash has not enhanced the development of the financial sector in nigeria. Financial deepening implications for macroeconomic. Financial deepening indicators and economic growth in nigeria. Efina financial inclusion conference assessing the impact. Modeling the impact of globalized financial flows gff on the growth rate 3. This empirical study examined financial deepening and economic development in nigeria between 1986 and 2007.
The policy implications derive from the findings is that, the country should come up with more policies to improve financial deepening intermediation and. Abstract this empirical study examined financial deepening and economic development in nigeria between 1986 and 2007. Financial deepening indicators and economic growth in. Agents live for ever, and at the start of day t the utility of an agent. The study used ardl model for the analysis for robust policy recommendations. Poverty reduction household consumption presents a ray of hope for capital formation in nigeria. This weakening effect stems from financial deepening, rather than from greater access or higher efficiency. The 2008 global financial crisis raised some legitimate questions about financial deepening and financial development, given that the crisis originated in advanced economies aes, where the financial sector had grown both very large and very complex. Understanding the value proposition for fintech in nigeria. The central focus is that a high level of financial deepening is a necessary condition for accelerating growth in an economy.
The effect of financial deepening on economic growth in nigeria 1985 2014 ifeanyi o. An examination of causation and efficiency a thesis submitted for the degree of doctor of philosophy by roseline oluitan department of economics and finance, brunel university, west london, uk. Raphael1 department of economics, obafemi awolowo university, ileife, nigeria aremo a. The study employed the conventional augmented dickey fuller test to test for stationarity among the three variables. Inclusive financial arrangement is becoming a policy issue in both developed and developing nations of the world as it has been perceived as a veritable tool for poverty alleviation and economic development. The study achieves this objective using quarterly time series data from 2000 to 20. This paper titled, financial deepening and performance of selected commercial banks in nigeria examined the extent to which financial deepening. Pdf financial deepening and economic growth in nigeria. Statement of problem financial deepening in nigeria banking system has grown and become a subject of debate in recent years. Tari moses karimo 1, and oliver ejike ogbonna 2 1 department of economics, niger delta university, wilberforce island, p. Efina financial inclusion conference assessing the impact of. As a consequence, the impact of financial deepening on growth would become smaller. Financial deepening and economic development of nigeria. Pdf financial deepening and economic growth in nigeria 1981.
The study adopted the todayamamoto augmented granger causality test and results showed that the growth financial deepening nexus in nigeria follows the supplyleading hypothesis. Financial deepening implications for macroeconomic volatility and economic growth in nigeria, a multivariate approach. This paper examined the direction of causality between financial deepening and economic growth in nigeria for the period 197020. The study examined the contribution of financial deepening to nigeria market stability by evaluating the influence of financial deepening on financial market money, capital and foreign exchange and commodity market energy market and agriculture the research employed multivariate regression in order to confirm the existence of. What is happening to the impact of financial deepening on. Financial deepening and manufacturing sector performance in. The study examines the causal relationship between financial deepening and economic growth in nigeria for the period 19902011. A vector autoregressive var cointegration and vector error. Development advisors to undertake an impact assessment of 9 key financial inclusion policies on deepening financial inclusion in nigeria. Effects of financial deepening on economic growth of nigeria 1981.
Ndukwe, 1995 turnaround management strategies for nigerian banks guest speaker, paper for 3rd bankers conference of the chartered institute of bankers of nigeria, september, ibadan. Time series variables for the period 1986 to 2007 were used. The two explanations are related in that premature financial development can lead to financial crises that have real. Financial deepening nobuhiro kiyotaki london school of economics john moore edinburgh university and london school of economics abstract we develop a model of. A unidirectional causality between economic growth and financial deepening in nigeria was discovered and it was concluded that financial deepening impacted on the growth of the nigerian economy. The study empirically investigated the relationship between financial deepening and bank performance using financial deepening. Financial deepening and economic growth nexus in nigeria. It used secondary data collected from central bank of nigeria statistical bulletin spanning. The study examined the relationship between financial deepening and entrepreneurial growth in nigeria.
In addition to the introductory section, this paper contains four other sections. It can refer both a wider choice of services and better access for different socioeconomic groups. The impact of financial sector development on nigeria economic growth between 19812016. Also, the fundamental question that has preoccupied researchers. Pdf the impact of financial deepening on economic growth.
This study investigates the contributions of capital market and financial deepening to economic growth in nigeria over the period of 1981 to 2012. Evidence from nigeria article pdf available in research journal of finance and accounting 310. Adopting the supplyleading hypothesis using variables such as broad. Pdf the book provides insight into the role of financial deepening on economic growth in nigeria. This paper examined the impact of financial deepening on economic growth in nigeria. This paper titled, financial deepening and performance of selected commercial banks in nigeria examined the extent to which financial deepening has affected the performance of selected nigerian commercial banks in terms of profitability. The results showed that the financial sector development indicators have long run relationship with economic growth. July edition evaluating the nexus between financial deepening and stock market in nigeria okoli 0 margaret nnenna 0 0 department of financial management, federal university of technology, owerri, nigeria the paper examines the relationship between financial deepening and stock market returns and volatility in the nigerian stock market. Similarly, 16 analysed financial deepening in low, middle and high income economies. Financial deepening in nigeria banking system has grown and become a subject of debate in recent years. Pdf financial deepening and economic growth in nigeria paul. The empirical evidence also suggests that this weakening effect reflects primarily the impact of financial deepening on total factor productivity growth, rather than on capital accumulation. This paper is a causality and impact study on financial deepening and economic growth in nigeria for a33year period covering 1981 20. Against all expectations, the nigerian economy has remained underdeveloped.