Financial Deepening and Entrepreneurial Growth in Nigeria: A Time Series Analysis (1986 – 2018)

This study examined the effect of financial deepening on entrepreneurial growth in Nigeria. Following the approach of the Granger Causality test with Autoregressive Distribute Lag (ARDL) technique of model estimation using data from 1986 to 2018, there is no significant effect of financial deepening on entrepreneurial growth. Entrepreneurial growth was found to have significantly influenced financial deepening through banking and insurance sector deepening. Consequently, the Central Bank of Nigeria (CBN) should encourage commercial banks to lend more for entrepreneurial activities which will in turn improve our gross domestic product. This can be achieve if the CBN can lower its monetary policy rate to a single digit as against the current double digit (14%). It would be ideal for the government (Federal, State and Local) to establish entrepreneurial training/skill acquisition centres in all tertiary institutions in the country. This will help a large fraction of the graduates of these institutions to inculcate entrepreneurial spirit to setting up small and medium scale enterprises in every part of the country.