what is the role of banking in Nigeria’s economy and unemployment rate?

The macroeconomic effect, financial inclusion, and a strong economy are all important parts of any well-off country’s economy.

In this case, we might not be doing this cause justice if we don’t take a look at the history of banking in Nigeria first.

Banks in Nigeria have been around for a long time.

A group called the African Banking Corporation was set up in 1883, and the British Bank of West Africa was set up in 1884. People who used to work for the British Bank of West Africa now work for First Bank of Nigeria PLC.

Banks are places where money is kept.

Banks are businesses or practices that deal with taking and protecting money from customers or other people or groups.

Owners can usually get their money back if they ask for it, which is called a cash withdrawal.

Loans can also be given to qualified people from a small amount of the money they have deposited. The bank makes money from the interest that is charged on these loans.

Owners of these principals, or depositors, get a small amount of this interest each month as a reward for their money being traded as a loan.
In a bigger picture, a bank is a licensed financial institution that the Central Bank of a country allows to do financial services within its rules and approvals.

There are a lot of things to talk about in this article about how banking has affected Nigeria’s unemployment rate at every turn, so we’ll talk about that here.

Nigerian banks play a lot of different roles in the country.

1. Banks help people start businesses.

When you think about how to stimulate the economy, you can’t forget about the private sector and businesses. However, the private sector and businesses owe their economic viability to the role banks play in facilitating their business transactions and daily activities.

Because of this, a closer look at most bank programs shows that they are designed to help and boost businesses, which in turn helps private sector businesses grow and create jobs.

2. Direct economic growth

Many people use banks to get loans. These loans could be short-term or long-term. Entrepreneurs who start small businesses can grow their businesses, which helps the economy of Nigeria.

For example, most start-ups/fintechs can get money from banks, which makes them one of the best economic simulators of the 21st century.

Many commercial banks offer loans to farmers and other people who work in agriculture. This is similar to what the bank of industry has been doing in the past.

The transactions in the business world are quick and easy to make

Entrepreneurship is usually a very time-oriented business. Banks help business owners reach out and complete their business transactions on time, but there have been times when payments have been late, which has led to lost business, which has led to lost revenue.

Banks have made huge improvements in speed, accuracy, and timeliness in modern business because transactions are based on how long they take to get back to you.
It’s also possible to make quick transactions from your home using e-channel platforms like the internet and on your mobile phone. These are always available, even if you don’t want to go to the bank.

4. It helps the country make more money.

I want to make it clear that the government gets money from the banks because they do business every day. This money is used to pay salaries, build roads, and more.

Banks charge a percentage of interest for loans they give out. They then send some of this interest and VAT to the government. Banks make money that the government spends and saves for the smooth running of the government.

In most cases, businesses that get loans grow and provide more goods and services, which means they pay taxes to the government. Through cheap loans, new businesses start up. This leads to more taxes being paid to the government because more businesses start up.

5. Keeps the economy in order.

Because the apex bank has so much power, it controls the activities of banks, which in turn controls the economy as a whole.

For example, businesses and people don’t have to carry a lot of cash anymore because of the cashless policy. Instead, they should use e-channels and do business online.

The introduction of stamp duty is meant to keep the economy under control. At every point, these policies are meant to change the direction of the Nigerian economy as a whole, as well.

In Nigeria, banking has had an effect on the jobless rate.

Unemployment is a big problem for the people of Nigeria. The rate is so high that something needs to be done to avoid having an impact on the most populous country in Africa.

The banks, on the other hand, have played an important role in reducing the unemployment rate in Nigeria, which is around 33.3 percent. They have hired Nigerians into important and relevant jobs in the banking industry.

Most of the people who work at the bank aren’t making enough money each month, but that’s better than not having a job at all.
Support or outsourced workers make up a large part of the bank’s staff. They work in these jobs:

1.1. Teller/who pay and receive cash alongside other cash transactions

2. Customer service

3.  Dispatch

4. Marketers

5.  Security

6. Cleaners

On average, there are 9000 support staff working in each commercial bank in Nigeria, while the core staff stands at about 4000. This adds up to an average of 13,000 people working in each bank across the country.

You can see how far this has come in Nigeria, where there is a lot of unemployment.

People who work for banks are usually fired after an evaluation. They get cash to help them start small businesses and make ends meet. In places where most people don’t do well, these businesses can rise to great heights.

In addition, new graduates are hired by most banks on a yearly basis. Most job seekers don’t get into the industry this way because of the age difference in the job ad.

Conclusion

Nigerian banks have played a huge role in the growth of the country’s economy by helping start-ups and businesses in the private sector. While there is a lot of unemployment in Nigeria, a lot of people work in the sector. If other parts of the economy had hired as many people, the unemployment rate would have been a little less.

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