Non-Bank Financial Institutions and Economic Development in Nigeria

Banks are so prominent in the Nigerian economy that non-bank financial institutions (NBFIs) are hardly noticed. It is against this background that this study sets out to investigate the role NBFIs play in economic development. It discovered that NBFIs play a fundamental and complementary developmental role in the economy. To assess the impact of NBFIs on the economy the study used data obtained from CBN Statistical Bulletin and the Statistical Directory of the National Insurance Commission. Trend analysis and Pearson’s correlation technique were used to analyse data and test hypotheses. Findings indicate that significant relationship exist between NBFIs credit to the manufacturing and agricultural sectors’ GDP. The same relationship was noted between PMIs credit and the building and construction sector’s GDP. In order to improve on this, fill up structural gaps and utilize their latent potentials, it was recommended that NBFIs should be made more relevant by channelling the Agricultural Credit Guarantee Scheme Fund through them, and they should be further strengthened through recapitalization.