DEPOSIT MONEY BANKS CONTRIBUTION AND ECONOMIC GROWTH IN NIGERIA

ABSTRACT

This study reviews Deposit Money Banks Contribution and Economic Growth in Nigeria for the period 2005–2019. Economic growth was proxy by real gross domestic product while deposit money banks contribution was measured by total banks’ deposits, total banks’ loans and advances, and total banks’ profit which was proxy with total banks’ asset. The data used was collected using secondary source of data only. The multiple regressions tool was employed for the analysis of the study. The study was passed through descriptive statistics, correlation analysis, and unit root test using the Augmented Dickey Fuller technique. The findings of the study shows that deposit money banks has positively and significantly contributed to the Nigerian economy within the period of the study (2005-2019). The study therefore, recommends among others that regulatory authorities such as the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) should create an awareness on the advantage of having deposits and also encourage banks to retain a specific percentage of deposits in their custody for better service and there should be constant check and reviews on these deposits ensuring that they are insured as well. In addition, this study recommends that there should be constant assessing of the interest rate at which loans and advances are granted by the Central Bank of Nigeria (CBN) in order to prevent overabundance of credit. Also, banks should improve their operational efficiency as a key success indicator in the banking sector is banks’ efficiency ratio. These are essential in order to increase the