- Promote savings. They supplement the efforts of commercial banks in mobilizing savings through their expert financial services.
- They finance long term projects which have long gestation period and high risks but with a big potential for growth and development of the economy e.g. construction of dams, roads, airports, etc.
- Encourage investment. They undertake investments using the savings mobilized e.g. they invest in securities which facilitate the process of capital formation and economic growth.
- They create job opportunities for the nationals. This enables people to earn income and improve their standard of living,
- They help in the development of the agricultural and industrial sectors by advancing loans to them as well as giving technical advice.
- They facilitate rural development since they are spread through the country e.g. cooperative societies mobilize rural savings under savings and credit schemes.
- Promote entrepreneurship. They advance credit to the indigenous entrepreneurs e.g. women groups, rural peasant farmers and small scale industrialists. They do so on soft terms.
- They provide competition for the banking financial intermediaries which improves the quality of services offered.
- Contribute revenue to the government by paying taxes and the revenue collected is used to construct social economic infrastructure.
- Develop labour skills. They provide training facilities to their employees in order to produce efficient workers and this contributes to human capital development.
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