Determinants of bank credit growth in Nigeria 1980-2010

The paper analyses the dominant factors influencing bank credit to private sector in Nigeria over the period 1980-2010 using the error correction modeling technique. The results show that broad money, cyclical risk premium and liquidity ratio tend to increase credit to the private sector. However, p...

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Bibliographic Details
Published in:European journal of sustainable development 2015-01, Vol.4 (1), p.23-30
Main Authors: Akinlo, A Enisan, Oni, I Oluwafemi
Format: Article
Language:English
Subjects:
Banks
Commercial credit
Economic development
Private sector
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Summary:The paper analyses the dominant factors influencing bank credit to private sector in Nigeria over the period 1980-2010 using the error correction modeling technique. The results show that broad money, cyclical risk premium and liquidity ratio tend to increase credit to the private sector. However, prime lending rate and reserve ratio lead to a reduction in credit to the private sector. Private credit increases with inflation, but not one to one, meaning that inflation tends to dampen real bank credit to the private sector.
ISSN:2239-5938
2239-6101
DOI:10.14207/ejsd.2015.v4n1p23