IMPACT OF BANK CREDIT ON ECONOMIC GROWTH OF NIGERIA
Mustafa Isedu and Osaruyi Jeffre Erhabor
Volume 1 Issue 1
Abstract
This research work empirically examines the impact s of Bank Credit on Economic Growth Nigeria, from 1980 to 2019. The research made use of secondary data which were collected from the Central Bank of Nigeria Statistical Bulletin. The lag criteria test was carried out to determine the number of lags to be used, stationary test was also carried out using ADF statistics, co-integration test was carried out to test for long run relationship. Since the cointegration test shows long run relationship, the Ordinary Least Squares Regression Techniques (OLS) were employed in the analysis of the data. The Bank Credit and money supply variables were statistically significant The Cash Ratio and (CR) variable has a positive sign which implies that the relationship between The Cash Ratio and the monetary policy ratio were not statistically significant. The result of the coefficient of determination (R2 ) shows that 98 percent of the total variation in Gross Domestic Product was explained by changes in the explanatory variables. The policy implication is that any time the government through the Central Bank wants to increase economic growth; it has to increase Bank credit and money supply. Base on the findings made in the course of this study. The study recommends that government through the Central Bank should encourage economic growth by increasing Bank credit and money supply. The Federal Government should direct financial institution to direct their loan and advances to deficient sector so as to encourage even growth and development in the economy. Key word: Bank Credit, Cash Ratio, Economic Growth, Money Supply,
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