Ponle Henry*
Despite the promising future of financial inclusion brought about by the widespread use of financial technologies, a number of obstacles persist. One way to accomplish this financial innovation goal is to be receptive to the many different approaches to financial intermediation. Therefore, the study investigates the impact of financial intermediation indicators on Nigeria's Gross Domestic Product (GDP). The findings offer that the positive coefficient for Bank Branches (BB) suggests that expanding bank branches significantly promotes economic growth. Bank Rural Loans (BRL) and Bank Rural Deposits (BRD) positively affect GDP, emphasizing the importance of rural finance in fostering economic development. Notably, Loans to Small Scale Enterprises (LSSE) have a strong positive coefficient; highlighting that improving credit access for Small and Medium-sized Enterprises (SMEs) can drive substantial GDP growth. This underscores the need to support SMEs, contributing to job creation and poverty reduction. However, the study also reveals that Interest Rates (INTR) negatively impact GDP, necessitating revaluating branch expansion strategies in high-interest rate environments. Conversely, an appreciating Exchange Rate (EXR) is linked to GDP growth, which is crucial for rural deposits and SMEs engaged in foreign transactions. The recommendations made will help the policymakers.
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