Financial institutions in Nigeria play a crucial role in the country's economic development. By analyzing data from 1981 to 2016, it was found that the activities of these institutions, especially loans to the private sector, have a significant positive impact on economic growth in both the short and long term. However, factors like bank loans, reserves, and interest rates had a minor negative effect on the economy. The study suggests that increasing lending to the private sector by banks can boost entrepreneurial development and ultimately drive economic growth in Nigeria.