Osabuohien, E. S. C. and Duruji, M. M.
BANK CONSOLIDATION AND INFORMAL FINANCIAL
SECTOR IN NIGERIA: ANALYTICAL PERSPECTIVE
OF LINKAGE EFFECTS.
Readings in Banking and Finance.
Department of Banking and Finance University of Uyo, Uyo, , pp. 25-47.
The financial sector plays significant role in the growth
of an economy via the process of directing funds from
surplus sector to areas of need - real sector. The
operations in which the banking sector can undertake
depend, to a large extent, on the soundness of the capital
base. Hence, the need for the bank consolidation that is
being pursued in Nigeria. However, the Nigerian
financial sector is highly dualistic in nature, involving
the formal and informal. Using the McK.innon-Shaw
analytical framework, the paper examines this policy
and explains how it can induce positive influence in the
economy, · especially by integrating the informal
financial sector. Thus, it is expected that bank
consolidation will increase the scope of the financial
transactions and create public confidence in the system
thereby encouraging those in the informal sector to
patronize the formal.
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