Impact of deposit money Banks Lending on real Sector Growth in Nigeria
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Date
2019-06-30
Authors
Jimoh, Abdulrazaq Taiye
Journal Title
Journal ISSN
Volume Title
Publisher
A Publication of Departments of Economics, Federal University Birnin Kebbi
Abstract
Over the years in Nigeria, the volume of lending by deposit money banks into the real sector has continued to increase. This lending behavior in general is expected to assist the economic agents, augment their vulnerability to economic shocks and ultimately enhance economic growth. However, the Nigerian economic performance is quite low relative to the volume of credit being received by one of the growth propellers of the country, the real sector. This study therefore investigated the impact of deposit money banks’ lending on real sector growth in Nigeria. Specifically, the study assessed the impact of bank lending to various components of the real economic sector of the country. Exp-post facto design was used for the study and data collected from the CBN statistical Bulletin. Using the Ordinary Least Square (OLS) multiple regression technique, the result showed that output of the real sector had a positive relationship with the deposit money banks’ lending to the real sector but negative relationship with interest rate and inflation. It was concluded that the real sector businesses have not been able to have access to adequate fund and that the ones assessed have not been effectively utilized for productive purposes. It was therefore recommended that banks should grant more credit to real business activities to boost their productive power. Banks should also strengthen their monitoring on the loans being granted to the sector to ensure that the credits are used for the purposes they are granted.
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Keywords
Bank, Lending, Credit, Real Sector, Growth Nigeria
Citation
Jimoh, et al.