Financial Intermediaries and Capital Market Development in Nigeria


Bamidele M. Ilo , Lucas O. Elumah , Olumuyiwa G. Yinusa


This study investigates the impact of financial intermediaries on
capital market development in Nigeria employing co-integration. To capture the
activities of financial intermediaries, five proxies were used to explain financial
intermediaries which include credit to the private sector to GDP, broad money
supply and total bank savings while on the other hand, market capitalization was
used to capture capital market development covering the period of 1981 to 2016.
The result revealed that in the long run, credit to private sector and money supply
will lead to an increase in capital market development while banks total savings
and government expenditure results to a decrease in capital market development
in the long run. The study recommends that the Central Bank of Nigeria should
ensure that the domestic credits provided by the banking sector are directed into
their appropriate uses and government expenditure be directed to productive
sectors and recurrent expenditure be reduced by government. Credit facilities
should also not be restricted to the large-scale manufacturing industries only, but
it should also be extended to small and medium scale enterprises.



Capital market
Central Bank
Financial Intermediaries

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