THE ROLE OF FINANCIAL INTERMEDIATION IN WEST AFRICAN ECONOMIC GROWTH: PANEL-BASED INVESTIGATION

Abstract

The connection between financial intermediation and economic growth has been a subject of intense discussion among scholars, policymakers, and finance professionals, especially in the wake of the global financial crisis of 2007-2009. This crisis had far-reaching effects on global output, remittance, employment, and economic growth, prompting a critical examination of the role of sound financial intermediation in fostering strong economic performance. The outcome of this debate holds significant implications for the decisions made by policymakers, development organizations, and researchers seeking to establish effective growth and development frameworks.

The established body of economic development literature underscores the substantial link between financial intermediation and economic growth. Scholars such as Greenwood (1990) and Bencivenga (1991) have highlighted the pivotal role of efficient and dynamic financial intermediation in the transmission of vital information and monitoring of borrower activities, essential for mitigating default risk and promoting sustainable economic growth.