The Implication of Banking Reforms for Economic Development in Nigeria (A Case Study of Zenith Bank Plc)

Abstract

This study assessed the relevancy of banking reforms in Nigeria and its contribution to banking industry by empirically investigating its implication on the nation’s economic development through their credit facilities’ capacity. Simple linear regression was adopted to develop a model that will systematically capture the dynamics of macroeconomic variables used in this study by isolating the impact of financial reforms on Zenith bank’s solvency. Results of the study also showed that the recent banking reforms have had stimulating effect on the Nigerian economy through increased shareholders’ fund and consequent increase in loans and advances available to the customers. This was in accordance with the expected transmission effect on the economy, Soludo reform of bank recapitalization resulted in more funds being available to customers’ for lending. The banking reforms contribution to development of the financial sector was significant as banks’ capacity to play their financing role in the economy was enhanced through increased capital base. Zenith Bank’s equity grew from N6.73billion in 2001 to N321.17billion in 2010 representing about 4,772% growth over the period of study.

Keywords: Banking reforms, Economic development, Regression, Nigeria