IMPACT OF FINANCIAL SECTOR DEVELOPMENT ON EMPLOYMENT GENERATION IN NIGERIA

Abstract

The study examines the influence of financial sector development on employment generation in Nigeria between 1999 and 2015 using Ordinary Least Square (OLS) regression method. Findings from the study showed that money supply has a significant relationship with Nigeria's employment levels. It showed that money supply has contributed immensely to the growth of employment levels. However, we found insignificant evidence that bank credit to private sector exerted positively to employments. This means loans from bank to private sector did go into the hands of businessmen who invested these funds into the economy thus the insignificant impact. The direct relationship between stock market capitalization and employment creation shows that an increased activity in the financial sector leads to higher employment levels, other things being equal. This is an indication that the lending activities of the banks have not really impacted on the economic progress of the country. Meanwhile, banks are expected to channel mobilized sayings to investors inform of loans and advances. Hence, the pointer is to identify those constraints and bottlenecks that are making it difficult for banks to make loans available to private market participants. Therefore, there is the need for consistent, transparent and fair policy to all the players in the sector, the need to develop viable and responsive financial services for the poor in Nigeria, government should pay off all creditor contractors so that they can pay banks and take new loans and also restore some of them to good financial health.