BANK CREDIT AND NIGERIA’S ECONOMIC GROWTH
Keywords:
Economic growth, Financial intermediation, Causality, Financial sectorAbstract
This paper investigates the significance of banks credit in stimulating output (GDP) and the factors that prompt financial intermediation within the economy. It is a contribution to the existing literature on finance and growth applied to the Nigerian economy. Evidence from this work shows that the marginal productivity coefficient of bank credit to the domestic economy (proxies by credit to the private sector) is positive but insignificant. The implication is that bank’s credit did not affect the productive sectors sufficiently for the later to impact significantly on the Nigerian economy. It was also observed that real output causes financial development, but not vice versa, and that export was not significant in driving financial development; but growth in financial sector was highly dependent on foreign capital inflows. With regard to this, the paper recommends that a strong and comprehensive legal framework that will aid in monitoring the performance of credit to the private sector and recovering debts owed to banks be established, so that banks will show willingness to lend to the private sector of the economy.
References
Adeniyi, O. M (2006). Bank credit and Economic Development in Nigeria. A case study of Deposit money Banks. Jos Journal of Economics, University of Jos.
Agbada, A.O (2010). Banking System credit as an instrument of Economic growth in Nigeria. CBN Bullion, April-June, 010; (4) 2.
Allen, D.S. & Ndikumana, L (1998). Financial Intermediation and Economic Growth in Southern Africa. working paper series 1998-004, The Federal Reserve Bank of St. Louis availableonline: http:research. stlouifed.org/wp/1998.004.pdf.
Al-yousity, Y.K (1999). On the role of exports in the economic Growth of Malaysia: A multivariate Analysis. International Economic Journal 13, 3.
Arvai,Z (2005). Capital Account Liberalization, capital flow patterns and policy Response in the Eu’s New member states. IMF working paper No:05/213.
Bencivenge, V.R and Smith, B.D (1991). Financial Intermediation and Endogenous growth. Review of Economic Studies, 58.
Bayoumi, T. Melander, O.(2008). Credit matters: Empirical Evidence on US macro-financial Linkage. IMF working paper.
Beck, T,; cull, R.& Jerome, A.T (2005). Bank Privatization and performance: Empirical Evidence from Nigeria. World Bank policy Research working paper No. 3511
Cater Hill, R. (2007). Principles of Geometries (3) John Wiley & sons, Inc USA.
Calderon, C & Liu, L. (2003) “The direction of causality between financial Development and Economic Growth”. Journal of Development Economics.71.
Central Bank of Nigeria (2003). CBN Briefs. Abuja Research Department.
Central Bank of Nigeria (2008). CBN statistical bulletin (Golden Jubilee Edition) Abuja: CBN. Central Bank of Nigeria (2009). Annual Reports, Abuja.
CBN Central Bank of Nigeria (2010). CBN Economic Report for the first half 2010.
Christopoulos, D & Tsionas E. (2004). Financial Development and Economic Growth: evidencefrom panel unit Root and cointegration Test. 73.
Dewett, K.K (2005). Modern Economic Journal of Development Economics theory. New
Delhi:shyam Lev Charitable trust.
Demetriades, O. P & Hussein, A. K (1996). Does financial Development cause Economic growth?
Time series evidence from 16 countries. Journal of Development Economics 51.
Dermetriades P.& Audrianova, S (2004). Financial and growth: what we know and what we need to know. University of Leicester.
Demirgue-Kunt, A & lervine, R. (2008). Finance sector polices and long Run Growth. The world
Bank Development Research group, policy Research working paper.
Duenwald, C.; Gueorguier, N & Schaechter, A. (2005) “Too much of a good thing? Credit Booms in Transaction Economics” IMF working paper No: 05/128.
Fase, M.M. G & Abma, R.C.A (2003). Financial Environment and Economic growth in selected
Asian Country. Journal of Asian Economic No. 14.
Favara, G. (2003). An Empirical Reassessment of the Relationship between finance and growth.
IMF working paper N0:03/123.
Freeer, J. (1980). The management of business finance, London: Pitman Publishing co.296-299. Ho, W.W.
Fieldsmith, R.W. (1969). financial structure and Development Yale university press, New Heres, Ghirmay, T.(2004). financial development and Economic growth in sub-saharan African
Countries: Evidence from Time series Analysis”. African Development Bank.
Goldsmith, R.W. (1969) Financial Structure and Development; Yale University press, new Haves, Greenwood, J. Jovanovic B. (1990) “Financial Development, growth and the distribution of income” Journal of political Economy, Vol. 98.
Grameme, C.; Linda, Y. (2006) Macroeconomic. Thomson learning, High Helborn House; 50-51 Bedford Row, London WCIR 4LR.
Gurley, J. & Shaw, E. (1967). Financial structure and Economic Development. Economic Development and Cultural change, Vol 15, No. 3.
Guyerati D.N (2004) Basic Econometries, (2nd Ed). New Delhi Rati . Mc.-Graw. Hill publishing Company Ltd.
Kasekende, L. (2008) “Development a sound Banking system” paper presented at IMF seminarTunisia.
King, R.G:& Levine, R (1993a). Financial and growth: Schumpeter might Be Right. QuarterlyJournal of Economics No.108.
King, R.G & Levine, R. (1993b). Finance, Entrepreneurship, and growth: Theory and evidence. Journal of monetary Economics, No. 32.
Levine, R (2002). Bank-Based or market-Based financial system: which is better? Journal of financial intermediation N0. 11.
Levine,R. Loayza, N & Beek, T (2000). Financial Intermediation and Economic growth: Causes and causality. Journal of Monetary Economic No. 46.
Lucas, R (1988). On the Mechanics of Economic Development. Journal of monetary Economic N0. 22
Mekinnon, R. (1973). Money and capital in Economic Development. Washington: The Brooking Institute.
Muksin K. & Eni J.P (2000). Financial Development and Economic growth in Turkey: further Evidence on the causality issue” Centre for International, finance and Economic Research Department of Economics Southborough University.
Nnanna, O.J; Engelama, A. and Odoko, F.O. (2004). Financial markets in Nigeria. Abuja kas Arts services.
Odedokim, M.O. (1989). Causalities between financial Aggregates and Economic Activities: The results form grarger’s test. Saving and Development, Vol. 23 No. 1.
Odedokim, M.O (1998). Financial Intermediation and Economic growth in Developing countries.
Faculty of commerce, University of Swaziland. Ochejele, J.J. (2007). Economic Analysis. Jos: Ichejum press.
Patrick, H. (1966). Financial Development and Economic growth in underdeveloped countries. Economic Development and Culture change 14.
Robinson, J. (1952) “The generalization of the general theory”. In the rate of interest and other Essays. London memillian.
Schempater, J.A. (1934) The theory of Economic Development. Cambridge MA: HarvardUniversity press.
Shaw, E. S. (1973) Financial Deeping in Economic Development. Oxford University Press, NewYork.
Spencer, H.M. (1977). Contemporary Macroeconomics (3rd Ed) Worth Publisher, New York.
Tang, T. C. (2000). Commercial banks lending and economic growth in Malaysia: An empirical
Study. International Journal of management No. 20. 3 .
Tang, T. C. (2003) “Bank Lending and Economic growth in Malaysia: Revisted“ Analysis 10.1.
Todara, M.P. and Smith, S. C. (2006). Economic Development (9): Pearson Education Limited, England.
Nwanyanwu, O.J (2011). An Analysis of Banks Credit on the Nigeria Economic growth (1992- 2008). Jos Journal of Economics Vol 4. N0.1.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
