Nigerian Journal of Banking and Financial Issues (NJBFI)

Financial Innovation Mechanisms And Economic Progress: A Review Of Literature

Abstract

This paper provided a comprehensive review of literature on the relationship between financial innovation mechanism and its implication on economic growth in Nigeria. The study examines the factors that have facilitated financial innovation in Nigeria. The paper presents a critical analysis of the literature and identifies gaps that require further research. The findings from the literature reviewed showed that financial innovation mechanisms such as digitalization, number of fintech start-ups, introduction of new financial products, and efficiency of financial innovation have the potential to stimulate economic growth in Nigeria. However, challenges such as poor infrastructure, low levels of financial literacy, and weak regulatory frameworks have limited the impact of financial innovation on economic growth. The study suggests on the need for policymakers to develop a comprehensive strategy that promotes financial innovation, strengthens regulatory frameworks, and improves infrastructure to support the growth of the financial sector and the broader economy in Nigeria.