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The mobilization of resources for national development has long been the crucial focus of development economists.Â This is because, for sustainable growth and development to take place, funds must be effectively mobilized and allocated to enable business and the economy harnesses their human, material and managerial resources for optimal output.Â It is against this background that every country has a financial system which serves as a mechanism for the mobilization of resources for the attainment of economic growth. Consequently, the more developed the financial system of an economy is, the more efficient it is likely to be in the mobilization and allocation of resources for development purposes.
The financial system of any society is the framework within which capital formation takes place.Â According to Odife (1994), it is the framework within which the savings of some members of the society are made available to other members of the society. Put differently, it is the arrangement or mechanism by which the savings surplus units of the economy transfer their resources to the borrowing deficit units for the purpose of enhancing economic growth (Okereke â€“ Onyiuke, 2009).Â The financial system is made up of two major markets.Â These are the money market and the capital market.Â According to Elakama (2009), the two markets are at the heart of the financial system.