Interest Rate, Savings Mobilization And Economic Growth: Evidence From Nigeria
  • Author(s): Bayo Fatukasi ; Ayeomoni, I. Omosebi
  • Paper ID: 1701432
  • Page: 341-351
  • Published Date: 02-08-2019
  • Published In: Iconic Research And Engineering Journals
  • Publisher: IRE Journals
  • e-ISSN: 2456-8880
  • Volume/Issue: Volume 3 Issue 1 July-2019
Abstract

Interest rate, savings mobilization and economic growth are of great importance to broad spectrum of people, the government, business, firms, entrepreneurs, foreign investors, the financial sector and the households. Most of the studies considered in Nigeria either examined interest rate-economic nexus, interest rate-saving mobilization or savings mobilization-economic growth. Thus, this study examined the relationship between interest rate, savings mobilization and economic growth in Nigeria. The study also examined the interactive effect of interest rate and savings mobilization on economic growth in Nigeria. The null hypothesis was that no relationship between interest rate, saving mobilization and economic growth in Nigeria. The study used Dynamic Ordinary Least Square technique on data obtained from the Central Bank of Nigeria, Statistical Bulletin, 1986-2016 to examine the relationship between the variables. The findings showed that 1% increase in real interest rate and savings mobilization will bring about 69% and 80% increase in economic growth in Nigeria. Furthermore, the interactive effect (INRT*GNS) used in this study showed that real interest rate and savings mobilization have significant effect on economic growth. By implication therefore, the interactive effect contributed significantly (81%) to increase economic growth within the study period. The study concluded that economic growth is strongly influenced by interest rate and savings mobilization in Nigeria. Therefore, the study recommended that there is need to adequately deepen the financial system that would enhance savings mobilization mechanism, so as to boost economic growth in Nigeria.

Keywords

Interest rate, savings mobilization, economic growth, dynamic ordinary least square

Citations

IRE Journals:
Bayo Fatukasi , Ayeomoni, I. Omosebi "Interest Rate, Savings Mobilization And Economic Growth: Evidence From Nigeria" Iconic Research And Engineering Journals Volume 3 Issue 1 2020 Page 341-351

IEEE:
Bayo Fatukasi , Ayeomoni, I. Omosebi "Interest Rate, Savings Mobilization And Economic Growth: Evidence From Nigeria" Iconic Research And Engineering Journals, 3(1)