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Authors
- Gabriel A. Anidiobu, PhD,
- Martha O. Oluka
- Fredrick A. Okeagu
Department of Banking and Finance
Faculty of Management Sciences
Enugu State University of Science and Technology, Agbani, Nigeria
Corresponding Author: +2347036610673; [email protected]
ABSTRACT
Research Purpose: To analyze financial intermediation and economic growth (2009–2024), using credit to private sector, loan-to-deposit and automated teller machine transactions value, with GDP growth rate as proxy for economic growth.
Design/Methodology/Approach: Ex-post facto design using annual time series data from 2009–2024 was employed, sourced from Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics and World Development Indicators. Autoregressive Distributed Lag (ARDL) model was used to examine short and long-run effects of financial intermediation indicators on GDP growth rate.
Finding: Credit to the private sector (β = 0.21; p < 0.05) and ATM transactions value (β = 0.18; p < 0.05) significantly boosted GDP growth, highlighting the importance of financial deepening and digital finance. Conversely, loan-to-deposit ratio (β = –0.14; p < 0.05), interest rate (β = –0.12; p < 0.05) and inflation (β = –0.20; p < 0.05) exerted a negative and significant effects, reflecting the growth constraints of conservative lending, high borrowing costs and price instability. Government expenditure (β = 0.09; p > 0.05) had a weaker a positive and significant influence.
Implications: Financial intermediation drive Nigeria’s long-run growth, while macroeconomic imbalances like unstable prices, costly borrowing and unpredictable government spending remain major obstacles.
Originality/Value Added: By integrating ATM usage into the ARDL framework and applying Endogenous Growth Theory with controls for government expenditure, inflation and interest rates, this study clarified how banks shaped Nigeria’s economic growth through traditional and digital financial services between 2009 and 2024.
Keywords: Financial intermediation, ATM transaction value, ARDL model and Nigeria.
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