Role of banking/financial system in economy In the analytical and empirical literature on the subject of finance and growth, there is a consensus among economists that development of the financial system contributes to economic growth (Rajan and Zingales, 2003). Financial development creates enabling conditions for growth through either a supply-leading (financial development spurs growth) or a demand-following (growth generates demand for financial products) channel.
Looking ahead, while demand for funds to secure liquidity for the year-end and the fiscal year-end and demand for working capital due to the rise in raw material prices until last summer will decline, demand for funds to continue and to restructure business are expected to gain momentum.