Impact of Financial Savings Mobilization on Economic Growth in Nigeria

Abstract

This study examined the impact of financial savings mobilization on economic growth in Nigeria using annual time series data ranging from 1981 to 2020. Applying the Persaran, Shin and Smith (2001) Autoregressive Distributed Lag (ARDL) model, the study found that credit to private sector (CPS), ratio of financial savings mobilization (FSM) and interest rate (INT) has a long and short run impact on economic growth in Nigeria. Findings also revealed that credit to private sector (CPS), ratio of financial savings mobilization (FSM) and interest rate (INT) were statistically insignificant on economic growth. Further, the ARDL regression result shows that the coefficients of credit to private sector (CPS), were positive to economic growth (RGDP) while the coefficients of financial savings mobilization (FSM) and interest rate (INT) were negative to economic growth (RGDP).  In view of the findings, the study recommends that there should be an increase in volume of credit to the private sector. The monetary authorities should use their credit guidelines to direct and/ or mandate banks to channel their financial mobilized savings