Remittance Inflows and Deposit Money Banks' Performance in Nigeria

This paper examined the relationship between remittances inflows and deposit money banks performance in Nigeria over the period 1998 to 2023. The specific objectives were to find out whether remittances inflows (RI), official development assistance (ODA) and financial openness (FO) and exchange rate (EXR) significantly affect deposit money banks’ performance. The Autoregressive Distributed Lag (ARDL) technique was employed to analyze the sourced data. The results obtained revealed that foreign remittances inflows (RI) has significant negative effect on deposit money banks’ performance in the short run and in the long run. The results further indicate that the official development assistance inflows (ODA) has significant positive impact on DMBP both in the short run and in the long run; financial openness (FOPS) and exchange rate (EXR) has a strong negative relationship with deposit money banks performance (DMBP) in the long run. The conclusion is that, in the determination of deposit money banks performance in Nigeria, all the hypothesized variables in the model (FORM, ODEVA, FOPS and EXR) are potent factors that should not be ignored by the government and regulatory body. The study recommends among others that, there is need for the regulatory authority (CBN) and bank management in Nigeria to develop alternative channel for attracting migrants’ remittances back home through the banking system. This can be done by channeling/converting most of these remittances to private investment back home, issuance of migrants/diaspora bonds and private debentures. This way, migrants will be attracted and very willing to invest in them and by so doing the banking system will have enough funds to support private sector investment and sustain steady liquidity in the banking sector.