DEPOSIT MONEY BANK LENDING AND THE GROWTH OF THE PRIVATE SECTOR IN NIGERIA

DEPOSIT MONEY BANK LENDING AND THE GROWTH OF THE PRIVATE SECTOR IN NIGERIA

INTRODUCTION

Modern economic systems distinguish between economic units that are in surplus and those that are in deficit, which results in a division of the mechanisms for saving and investing. Financial institutions were created as a result, and one of its duties is to transmit or remit money from savers to investors (borrowers) (Levine, 1997). The banks that accept deposits are one of these institutions. According to Shittu (2012), the deposit money banks’ intermediation functions put them in a situation where they are both the trustees of the savings of widely scattered surplus economic units and the ones who decide how quickly and how the economy will expand. The banking industry, particularly the deposit money banks, which have the highest percentage of deposits in the economy and also provide the groundwork for the growth of the financial system, dominates the Nigerian financial system. Deposit money banks are financial organizations that offer a range of financial services, including the acceptance of deposits, the issuance of loans and advances, the financing of mortgages, and the sale of other financial products like certificates of deposit, savings accounts, and current accounts. The prevalent theory holds that deposit money banks function as financial institutions.