scholarly journals Commercial Bank Loans and the Performance of Small and Medium Scale Enterprises (SMEs) In Nigeria

2021 ◽  
Vol 6 (6) ◽  
pp. 46-59
Author(s):  
Kanu Success Ikechi ◽  
Nwadiubu Anthony
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Bank Loans ◽  
Financial Assistance ◽  
Least Square ◽  
Series Data ◽  
Industrial Transformation ◽  
Medium Scale ◽  
Ex Post ◽  
The Impact

The contributions of Small and Medium Scale Enterprises (SMEs) to the growth of Nigerian economy cannot be understated as they seem to drive the economic and industrial transformation of the country. Notwithstanding the acknowledged role of SMEs, a number of factors tend to limit their growth potentials. They’re still faced with the issue of funding and to overcome this problem, external borrowing has become inevitable. Commercial banks appear to be the most likely source of funds. Thus, the main objective of this study is to ascertain the impact of commercial bank loans on the performance of small and medium scale enterprises in Nigeria. While an ex-post facto research design was adopted in the investigation; a least square regression analysis was carried out on a time-series data to ascertain relationships, and to avert the emergence of spurious results, unit root tests were conducted. Outcome of the study indicates that, there exists an inverse relationship (though not statistically significant) between the amount of commercial bank loans (CBLSME) made available to SMEs and the output of SMEs (OPSME) in Nigeria This implies that as CBLSME increases, OPSME decreases. The negative sign exhibited by OPSME is not in line with our apriori expectation because an increase in CBLSME is supposed to cause an increase in investment which is expected to boost the output of SMEs. This trend has shown the poor attitude of commercial banks towards the granting of loans to SMEs in Nigeria. The study also revealed that a seeming upsurge in the activities of SMEs may not have reduced the rate of unemployment in Nigeria as a good number of people employed by the SMEs are probably under-employed. Conclusively, the inability of our commercial banks to grant effective loans to SMEs have translated to low level of output of SMEs to GDP. This in turn has impacted negatively on average capacity utilization and a consequent hike in the already strained unemployment situation in Nigeria. While commercial banks are expected to come to the rescue of SMEs, the truth must be said, that these institutions are profit oriented and may not be in a vantage position to give long term loans with depositors funds that are predominantly short tenured. Based on the findings of study, it is recommended that, the intervention programs put in place by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to ameliorate the challenges of the SMEs should be strengthened. It is not out of place too, for commercial banks to re-jig their SME desks in order to offer sustainable financial assistance to the SMEs. Lastly, the Bank of Industry (BOI) should be properly positioned in its mandate of providing financial assistance for the establishment of large, medium and small projects as well as the expansion, diversification and modernization of existing enterprises and to rehabilitate the ailing ones.

scholarly journals Voluntary Assets and Income Declaration Scheme (VAIDS) and Company Income Tax in Nigeria: A Post-Mortem

2019 ◽  
Vol 6 (10) ◽  
pp. 261-273
Author(s):  
Onwuka Okwara Onwuka
Keyword(s):  
Income Tax ◽  
Time Series Data ◽  
Research Work ◽  
Least Square ◽  
Series Data ◽  
Post Mortem ◽  
Ex Post ◽  
Ex Post Facto ◽  
Ordinary Least Square Regression ◽  
The Impact

Abstract The contribution of taxation to any economy globally cannot be over emphasized.  This research work is on Voluntary Assets and Income Declaration Scheme (VAIDS) and Company Income Tax (CIT): A Post-Mortem. The main objective of this study is to explore the impact of Voluntary Assets and Income Declaration Scheme on company income tax in Nigeria. Time series data were applied in carrying out this research work. Ordinary least square regression analysis was employed in this work with the use of STATA 13 package. The scope of the study is basically focused on the assessment and effect of voluntary assets and income declaration scheme on company income tax in Nigeria from June 2017 to March 2018 a period of 9 months but later extended to July 2018 by the Federal Government of Nigeria. This research focuses on a broad range of issues with the collection of a diversity of data in the field of VAIDS and company income. A literature review was used to determine the theoretical basis for research topic and prior research method conducted on various aspects of relating to VAIDS and company income tax. This work adopted the ex-post-facto research design. The findings reveal that Company Income Tax has an insignificant impact on VAIDS. The work recommends that the voluntary assets and income declaration scheme should be a permanent programme as a separate body should be set up to inspect and ensure the smooth running of the programme.  Key words: VAIDS, Tax, Executive, Order, Income

scholarly journals Lending and Cash Required Reserve: Empirical Evidence from Ethiopian Commercial Bank

2018 ◽  
Vol 14 (13) ◽  
pp. 179 ◽  
Author(s):  
Mitku Malede Yimer
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Predictor Variable ◽  
Bank Lending ◽  
Least Square ◽  
Financial Data ◽  
Ordinary Least Square ◽  
Credit Creation ◽  
The Impact ◽  
The Relationship

The study was mainly intended to determine the effect of cash required reserve on commercial bank lending in Ethiopia using panel data of eight purposively chosen commercial banks over the period of eleven years (2005 to 2015). The investigation tested the relationship between commercial bank lending and cash required reserve. Eleven years financial data of eight purposively chosen commercial banks were used for analysis purpose. Ordinary least square model was applied to test the impact of predictor variable on commercial bank lending. The result suggests that, there is no significant relationship between commercial bank lending and cash required reserve in Ethiopian commercial. This study suggests that commercial bank have to give less emphasis to cash required reserve because it doesn’t weakens banks credit creation ability and does not leads a bank to be insolvent.

scholarly journals Capitalization and bank performance: Evidence from Nigerian Banking Sector

e-Finanse ◽  
2017 ◽  
Vol 13 (4) ◽  
pp. 67-75 ◽  
Author(s):  
Taiwo Adewale Muritala ◽  
Muftau Adeniyi Ijaiya ◽  
Ahmed Oluwatobi Adekunle ◽  
Mobolaji Kafayat Abidoye
Keyword(s):  
Banking Sector ◽  
Time Series Data ◽  
Unit Root Test ◽  
Bank Loans ◽  
Least Square ◽  
Policy Implications ◽  
Bank Loan ◽  
Series Data ◽  
Bank Performance ◽  
The Impact

AbstractThe study examines the impact of capitalization on bank performance of some selected commercial banks in Nigeria using econometric analysis on annual time series data of ten banks over the period of 2006 to 2014. The results from a Levin, Lin & Chu unit root test show that all the variables were non-stationary. The results from a Panel Least Square (PLS) estimate found that operating expenses, bank size and bank loan are negatively related to profitability but only bank loans are significant. On the other hand, bank deposit and bank liquidity are positively related to profitability but not significant. This conclusion has important policy implications for emerging countries like Nigeria as it suggests that capitalisation and total assets of a bank should be periodically evaluated. The regulatory authorities will therefore need to put in place appropriate machinery that will address issues of bank liquidity and assure asset quality in the industry.

scholarly journals Impact of commercial bank credit on agricultural output in Nigeria

2019 ◽  
Vol 5 (1) ◽  
pp. 5-20
Author(s):  
Aduralere O. Oyelade
Keyword(s):  
Interest Rate ◽  
Trend Analysis ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Ordinary Least Squares ◽  
Least Square ◽  
Bank Loan ◽  
Bank Credit ◽  
Agricultural Output ◽  
The Impact

Purpose. The purpose of this study was to investigated the impact of commercial bank credits on agricultural output in Nigeria over the period 1980 to 2015 by setting three specific objectives which are to examine the trend of commercial bank credit and agricultural output in Nigeria; to investigate the effect of commercial bank credit on agricultural output in Nigeria and to investigate the effect of commercial bank credit on subsector of agriculture in Nigeria. The trend analysis and the impact of commercial bank credit on subsector of agriculture in Nigeria make this work unique and different from other studies in this area. Trend analysis was used to achieve the first objective and fully modified ordinary least square (OLS) for objective two and three. Methodology. The study employed Fully Modified Ordinary Least Squares (FMOLS) approach. Findings. It was evidenced that interest rate on commercial banks’ credit to agriculture and deposit money bank’s assets are statistically significant in determine agricultural output in Nigeria within the period considered. Also, commercial bank loan on agriculture and deposit money bank’s assets determine the output of crop production in Nigeria; commercial bank loan on agriculture and interest rate on commercial banks’ credit to agriculture determine the output of livestock production in Nigeria and commercial bank loan on agriculture and interest rate on commercial banks’ credit to agriculture determine the output of forestry in Nigeria while commercial bank loan on agriculture and interest rate on commercial banks’ credit to agriculture determine the output of fishing in Nigeria. Limitations. This study is limited because the study does not include other variables that determine the output of agricultural sector in Nigeria. Also, other theories and methods can still be used by other researcher to make it different from this work. Originality. This is an original work and has neither been published in any other peer-reviewed journal nor is under consideration for publication by any other journal.

Determinants of commercial bank loan and advance disbursement: the case of private Ethiopian commercial banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tekeste Birhanu ◽  
Sewunet Bosho Deressa ◽  
Hossein Azadi ◽  
Ants-Hannes Viira ◽  
Steven Van Passel ◽  
...  
Keyword(s):  
Credit Risk ◽  
Commercial Bank ◽  
Commercial Banks ◽  
Inflation Rate ◽  
Bank Loans ◽  
Bank Loan ◽  
Portfolio Investment ◽  
Negative Effects ◽  
Content Type ◽  
Lending Rate

PurposeThis paper aimed to investigate the determinants of loans and advances from commercial banks in the case of Ethiopian private commercial banks.Design/methodology/approachThe study randomly selected seven commercial banks to represent the population stratified on their asset, deposit and paid-up capital amounts. The study utilized an unbalanced panel data model as each bank started operation at a different period of time and considered the period 1995–2016 for secondary details.FindingsThe findings showed that the deposit size, credit risk, portfolio investment, average lending rate, real gross domestic product (GDP) and inflation rate had significant and optimistic effects on the lending and advancement of private commercial banks. On the contrary, liquidity ratio had significant and negative effects on private commercial bank loans and advances. Finally, the study forwarded a feasible recommendation for concerned organs to focus on deposit size, credit risk, portfolio investment, average lending rate, real GDP, inflation rate and liquidity ratio. The results of this study will help banking industry policymakers and planners understand how to minimize inflation and unemployment by improving development and sustainable economic growth.Originality/valueThe findings of this study can also affect the general attitudes of a society by increasing knowledge and improve the quality of life for the general public.

scholarly journals (The impact of financial performance assessment on the quality of banking performance An applied study on the Commercial Bank of Chad in the Republic of Chad for the period (2008-2013: أثر تقويم الأداء المالي على جودة الأداء المصرفي دراسة تطبيقية على مصرف شاري التجاري بجمهورية تشاد للفترة (2008-2013م)

2017 ◽  
Vol 1 (6) ◽  
Author(s):  
Mohammed Bukhari Hassan Ali
Keyword(s):  
Commercial Bank ◽  
Financial Distress ◽  
Financial Management ◽  
Financial Analysis ◽  
High Ratio ◽  
Bank Loans ◽  
General Classification ◽  
The Republic ◽  
The Impact

The study addressed the issue of the quality of financial Shari commercial bank management and the extent of their relationship to the funding of competence, to see how the quality of financial management, and to identify its transparency when granting credit, and to identify the general classification of the bank on CAMELS index of the banking classification. Study the problem in the following questions: Are the financial and credit policies of the bank bank?. It is that the bank actually applied followed in the granting of credit financial procedures? Is bank financing of the bank efficient? Is that the bank applied to all financial regulations and decisions of the Organization of the banking business? The study sought to analyze and test the hypotheses: The bank's reliance on financial analysis to rationalize decisions granting Alaitmat lead to the efficiency of the funding. The Bank’s general classification in term of quality, liquidity adequacy, financial level of default and loan-to deposit ratio are within the good classification. The Chari commercial Bank's performance is good. Used in the study are: descriptive analytical method and the historical approach in addition to the deductive approach. The study reached the following findings: The results of the study that there is a positive relationship between the quality of financial management bank (Shari) commercial financing and efficiency, the bank loans relative to deposits above the industry the desired level standard, the bank in case of default Mali due to the high ratio of non-performing loans and by passed the industry standard, the bank is suffering from an acute shortage of liquidity, causing falter in the bank's operations. The most important recommendations of the study: the need for Shari Commercial Bank to measure and find out the loans to deposits ratio and liquidity of the bank continuously to meet the obligations and withdrawals daily is expected, should the bank not to grant loans only after making sure it fits with deposits and ensure liquidity of the bank to avoid potential financial distress, the need to seek to provide all types of banking services offered by the rest of the workforce in the country's banks.

scholarly journals The Impact of Macroeconomic Variables on Sectoral Indices in Indonesia

ETIKONOMI ◽  
2017 ◽  
Vol 16 (1) ◽  
pp. 71-80 ◽  
Author(s):  
Bambang Sutrisno
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Inflation Rate ◽  
Emerging Market ◽  
Estimation Method ◽  
Least Square ◽  
Series Data ◽  
Macroeconomic Variables ◽  
The Interest Rate ◽  
The Impact

This study aims to examine the effect of macroeconomic variables on sectoral indices in the Indonesian Stock Exchange. The difference in sensitiveness among sectors is an interesting issue to investigate this relationship in an emerging market, such as Indonesia. This study employs ordinary least square (OLS) as an estimation method with monthly time-series data from January 2005 to December 2014. The results document that the interest rate, inflation rate, and exchange rate simultaneously have a significant effect on sectoral indices in Indonesia. The interest rate partially shows a significant negative influence on all sectors except basic industry and chemical, finance, infrastructure, utilities, and transportation, and miscellaneous industry sectors. The inflation rate partially has no significant effect on all sectors. The exchange rate partially has a significant negative impact on all industries.DOI: 10.15408/etk.v16i1.4323

scholarly journals Pengaruh Variabel Internal Perbankan Terhadap Kinerja Bank Konvensional di Indonesia

2019 ◽  
Vol 4 (1) ◽  
pp. 90
Author(s):  
Ali Akbar
Keyword(s):  
Commercial Banks ◽  
Time Series Data ◽  
Partial Least Square ◽  
Least Square ◽  
Series Data ◽  
Internal Variables ◽  
Operating Income ◽  
Performance Factors ◽  
Conventional Banks ◽  
Dominant Influence

This research is to know the influence of internal variables of banking (amount of credit and operational expense than operating income (BOPO)) on the performance of conventional banks. The population in this research is the whole of conventional commercial banks in Indonesia year of 2010-2017. The sampel  is the conventional commercial banks by as much as 14 banks, with time series data. The method used is the analysis of partial least square (PLS). The results showed that internal variables of banking (amount of credit, BOPO) negative and no significant effect on performance of conventional banks (CAR, NPL, ROA, LDR) and amount of credit credit is an indicator of a dominant influence variation/change from a conventional banks performance factors (CAR, NPL, ROA and LDR).

scholarly journals Bank And Non-Bank Financial Institutions And The Development Of The Nigerian Economy

2015 ◽  
Vol 3 (7) ◽  
pp. 23-36
Author(s):  
Peter A Okere ◽  
Ndugbu Michael ◽  
J.N Ojiegbe ◽  
Barr. Lawrence Uzowuru
Keyword(s):  
Financial Institutions ◽  
Growth And Development ◽  
Banking Sector ◽  
Bank Loans ◽  
Least Square ◽  
Moral Hazards ◽  
Explanatory Variables ◽  
Consumer Loans ◽  
Term Basis ◽  
The Impact

The focus of this study was on the impact of bank and non-bank financial institutions on the growth and development of the Nigerian economy. In an attempt to achieve the objectives of the research, data for the period 1992 to 2012 were collected from the CBN publications. Hypotheses were also formulated. The data collected were analysed using the E-views econometric software under the ordinary least square (OLS) regression analysis. The study as confirmed by the result of the joint test revealed that the financial institutions play prominent role on the growth and development of the Nigerian economy. However, it was further revealed that individual contributions of the explanatory variables varied. For example, the Deposit Money Banks were revealed to have impacted very insignificantly to the growth and development of the Nigerian economy. This may not be unconnected with the unwholesome practices in the banking sector such as granting of loans/advances to “ghost” applicants, diversion of loans and advances granted, high incidence of moral hazards. In view of the above, it is recommended among others that government should come up with lending policies that will not only reduce diversions of bank loans/advances but will deter persons involved in such sharp practices. Such loans and advances which must be on long-term basis should be extended to needy investors in the real sector. Consumer loans and also loans and advances for commerce do not play prominent role in the growth and development of the economy and thus should be discouraged. The current and on-going reforms in the financial sector should be encouraged and maintained.

A study of the relationship between employee wage and commercial banks efficiency in China

2016 ◽  
Vol 7 (2) ◽  
pp. 147-159
Author(s):  
Jiangtao Li ◽  
Jianyue Ji ◽  
Yanxia Wang
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Calculated Data ◽  
Wage Structure ◽  
Tobit Regression ◽  
Bank Efficiency ◽  
Content Type ◽  
Per Capita ◽  
The Impact ◽  
The Relationship

Purpose Efficiency of a commercial bank affects both its competitiveness and the role it plays in the process of economic development. Although great efforts have been exerted in developing the various aspects of banking efficiency, there seems to be a lack of research on examining the impact of the bank efficiency from the employee wage perspective. The mechanism of how employee wage affects commercial bank efficiency and the relationship between the two were analyzed in this paper. Based on the growing body of research on efficiency in banking, the aim of this paper is to examine if competitiveness of employee wages at any commercial bank has any impact on the bank efficiency score. Design/methodology/approach The method used was quantitative analysis, which was based on comparing the evaluated efficiencies of the banks with employee wages published in the bank reports. The empirical data in this paper were based on 16 Chinese listed commercial banks from 2004 to 2012. The per capita wage of commercial banks was selected as the wage indicator, and the efficiency value obtained by the slack-based measure (SBM) model was selected as the efficiency indicator. According to the calculated data, the Tobit regression model was built to analyze the relationship between employee wage and commercial bank efficiency. Findings The research results show that employee wage is the key variable that influences the efficiency of Chinese commercial banks, and the inverted U-shaped relationship between employee wage and commercial banks efficiency shows up. Practical implications The wage structure data of the composition of basic pay and bonus were not available at the time of conducting the research. Per capita wages were used instead to reflect the employee wage levels of Chinese banks. Originality/value This study can provide some help for the banking industry by analyzing the wage levels from the perspective of efficiency and also further enriches the theoretical system of the relationship between employee wage and bank efficiency.

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