Determinants of Commercial Bank Lending Policy in Nigeria: An Econometric Approach

Authors

  • Lucky E. Ujuju, Lyndon M. Etale Department of Banking and Finance, Delta State Polytechnic, Ozoro, Delta State, Nigeria Department of Finance and Accountancy,Faculty of Management Sciences, Niger Delta University,Wilberforce Island, Bayelsa State, Nigeria

DOI:

https://doi.org/10.15520/ijbm.vol5.iss4.54.pp89-93

Abstract

This study examined the relationship between macroeconomic variables dynamics (such as gross domestic product, prime lending rate, exchange rate and consumer price index) and commercial bank lending in Nigeria. Time series data on the study variables were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin for the period 1985 – 2014. The study employed Ordinary Least Squares (OLS) technique to analyze data. The study found that gross domestic product, exchange rate and consumer price Index had positive correlation with commercial bank lending in Nigeria. While prime lending rate had negative relationship with commercial bank lending in Nigeria. The study recommended a policy shift towards infrastructural development and an increased productive base of the notion in order to improve the financial sector performance by stabilizing the macroeconomic variables. This it is hoped would not only help in enhancing the profitability of banks in the country but would also improve the standard of living of the Nigerian people.

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Published

2016-08-07

Issue

Vol. 5 No. 04 (2016)

Section

Articles

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“I certify that I have participated sufficiently in the conception and design of this work and the analysis of the data (wherever applicable), as well as the writing of the manuscript, to take public responsibility for it. I believe the manuscript represents valid work. I have reviewed the final version of the manuscript and approve it for publication. Neither has the manuscript nor one with substantially similar content under my authorship been published nor is being considered for publication elsewhere, except as described in an attachment. Furthermore I attest that I shall produce the data upon which the manuscript is based for examination by the editors or their assignees, if requested.”

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