Commercial Banking and Emerging Economies: Evidence from Nigeria

Abstract

Economic development is about enhancing the productive capacity of an economy, by using available resources to reduce risks, remove impediments which otherwise could lower costs and hinder investment. Invariably, the role of finance in economic development is often, widely, acknowledged in literature. It has been argued that financial intermediation through the banking system played a pivotal role in economic development by affecting the allocation of savings, thereby, improving productivity, technical change and the rate of economic growth. The main thrust of this paper was to examine whether there is any significant association among commercial banking institutions and the Nigerian economy. It was also set out to investigate whether commercial banks play any pivotal role in the smooth running of the financial and commercial operations of other sectors in the economy as well as establishing whether commercial banks have contributed to the growth and development of the Nigerian economy. Survey design method through the administration of structured questionnaires was employed and the techniques of data analysis adopted were analysis of variance, t-test statistic and chi-square statistics. The study found a significant association among the banking institutions and the economy and that banks have contributed relatively to the growth and development of the Nigerian economy.