ABSTRACT

This study examines the relationship that exists between financial institutions and economic development in Nigeria. It specifically focused on ascertaining the behaviours of Total asset, Liquid liabilities, and Total deposit on GDP growth rate, as the dependent variable. Secondary data on the three (3) selected independent variables were collected for even (11) deposit money banks between 2016 and 2022. The data was analysed using descriptive statistics, correlation matrix and panel regression technique. The result showed that total asset of deposit money banks has a significant impact on GDP growth rate (GDPgr) of deposit money banks. Liquid liabilities exerts a positive and insignificant effect on GDP growth rate (GDPgr) of deposit money banks in Nigeria. Total deposit exerts a positive and significant effect on GDP growth rate (GDPgr) of deposit money banks in Nigeria. The study recommends, among others, that financial institutions should actively strengthen its regulatory framework to ensure stability and mitigate systemic risks. This includes regular monitoring, enforcing prudential regulations, and implementing measures to prevent financial crises and that financial institutions should actively work towards increasing financial inclusion in Nigeria. This means providing access to financial services, such as savings accounts, loans, and insurance, to individuals and businesses in both urban and rural areas so as to increase customers’ deposit.