scholarly journals Financial intermediation in deposit money banks and Nigerian economy

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Central Bank ◽  
Significant Relationship ◽  
Financial Intermediation ◽  
Banking System ◽  
Secondary Data ◽  
Bank Credit ◽  
Domestic Product ◽  
Real Sector

The paper summarizes the arguments and counterarguments within the scientific discussion on financial intermediation in deposit money banks and economic growth in Nigeria. The main purpose of the research is to examine the relationship between financial intermediation in deposit money banks and the Nigerian economy. A systematization literary approach for solving the problem is Regression Analysis. Secondary data was sourced from Central Bank of Nigeria Statistical Bulletin. The results of findings within the years of analysis (2000-2017) indicated that there was significant relationship between Total Bank Credit and monetary policy indices on deposit money banks in Nigeria. It was also discovered that there was significant relationship between Gross domestic product and total credit in deposit money banks of Nigeria. Based on the objective and findings of this study, the study therefore recommends that Deposit Money Banks in Nigeria should foster higher level of liquidity in order to increase its ability to cover withdrawals made by its customers and to increase the loan and advances to customers even with the monetary policy indices on deposit money banks. The study also recommends that Deposit Money banks should distribute adequate credit to the real sector for productive purposes in order to increase Gross domestic product. The conclusions that can be drawn from the findings of this study is that with the level of minimum reserve maintained by Deposit Money bank with Central bank of Nigeria, there is adequate availability of credit for real sector investments. High lending rates of deposit money banks may make many customers/investors to consider other sources of finance. Bank Credit/loan is still greatly increasing the production of goods and services in the Nigeria Deposit Money Banking System because of utilisation of the loans by investors.

scholarly journals Implications of Financial Intermediation on The Performance of Commercial Banks in Nigeria: 2000-2017

2019 ◽  
Vol 3 (4) ◽  
pp. 94-105
Author(s):  
J.A. Adewole ◽  
F.D. Dare ◽  
J.K. Ogunyemi
Keyword(s):  
Gross Domestic Product ◽  
Commercial Bank ◽  
Significant Relationship ◽  
Commercial Banks ◽  
Financial Intermediation ◽  
Commercial Banking ◽  
Domestic Product ◽  
Bank Performance ◽  
Real Sector ◽  
Performance Equation

The paper examined the arguments and counterarguments within the scientific discussion on Financial Intermediation and the performance of Commercial banks in Nigeria. Despite a series of reforms and restructuring aimed at enhancing the bank’s ability to provide services effectively, establish branch networks and finance the real sector, there is still insufficient domestic credit to commercial real-estate banks, affecting the success of financial intermediation in the Nigerian commercial banking sector. The main purpose of this study is to examine the impact of financial intermediation on the performance of commercial banks in Nigeria. The data came from a statistical bulletin of the Central Bank of Nigeria. A systematic literary approach to data analysis is regression analysis. In Equation 1, it was found that there is a significant relationship between total lending and the commercial bank lending rate in Nigeria. In Equation 2, it was found that there is a significant relationship between the overall credit ratio and the cash reserve in the commercial banks of Nigeria. In the commercial bank performance equation, it was found that there is a significant relationship between the total assets and the capital involved by commercial banks in Nigeria. In the commercial bank performance equation, it was found that there was no significant relationship between the loan and deposit ratio and the liquidity ratio in the commercial banks of Nigeria. It has also been found in Commercial Banking Performance Equation 5 that there is a significant relationship between gross domestic product and total credit in the commercial banks of Nigeria. Thus, the study authors recommend reducing the commercial bank loan rate so that investors see commercial banks as the number one source of funding, the Central Bank of Nigeria should increase the commercial banks’ minimum reserve in order to facilitate adequate lending to commercial customers by clients/investors. Commercial banks need to make effective use of the capital used to increase profitability. Commercial banks should help increase liquidity to increase their ability to cover customer withdrawals and increase loans and advances to customers. Commercial banks should allocate proper credit to the real sector for productive purposes in order to increase gross domestic product. Keywords: Financial Intermediation, Commercial Banks, Gross Domestic Product, Commercial Bank Credit.

scholarly journals The Effect Of Credit To The Inflation Rate Through Gross Domestic Product In Indonesia

2018 ◽  
Vol 5 (2) ◽  
pp. 78
Author(s):  
Anas Iswanto Anwar ◽  
Ali Akbar
Keyword(s):  
Gross Domestic Product ◽  
Inflation Rate ◽  
Secondary Data ◽  
Least Square ◽  
Bank Credit ◽  
Domestic Product ◽  
Working Capital ◽  
Ordinary Least Square ◽  
Credit Channels ◽  
Transmission Of Monetary Policy

Credit markets are not always balanced because of unbalanced information and other causes. There are two credit channels that influence the transmission of monetary policy from finance to the real sector, namely bank credit channels that are more concerned with the behavior of banks that are more selective in credit selection because of asymmetric information.This study aims to determine the effect of credit that consists of investment credit, working capital credit and consumption credit to the inflation rate through Gross Domestic Product (GDP) in Indonesia. The overall data used in this study is secondary data from the result of systematic recording in the form of time series from 2007 to 2016 obtained from the Central Bureau of Statistics, Bank Indonesia Report and Indonesian Banking Statistics. Data were analyzed by using multiple regression with Ordinary Least Square (OLS) approach. Based on the results of the research, simultaneous credit has a positive and significant effect on inflation through GDP and partially found that investment credit and working capital credit have positive and significant effect to inflation through GDP, while consumption credit has positive and insignificant effect.

scholarly journals Interest Rate Management and the Nigerian Economy (1986 — 2018)

2019 ◽  
pp. 1-15
Author(s):  
Kalu, Uko Kalu ◽  
Anyanwaokoro Mike
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Gross Domestic Product ◽  
Money Supply ◽  
Significant Relationship ◽  
Domestic Product ◽  
Ex Post ◽  
The Impact ◽  
Bound Test

This study sought to examine the impact of interest rate on the Nigeria’s economy during the pre and post Regulation periods (1986 – 2013). It also investigated the joint influence of Inflation, Investment, Exchange Rate, Money Supply and Monetary Policy Rate individually on the Gross domestic Product which was used a proxy for output as well as the causality between all the factors combined and gross domestic product. Ex post facto method was adopted In order to test the hypothesis, the researcher adopted Augmented Dickey Fuller, ARDL, Bound Test and Error Correction Model. The result showed that no significant relationship exists between Gross Domestic Product and Investment, Exchange Rate and Money Supply while still affirming that a significant relationship exist between Gross Domestic Product, Monetary Policy Rate and inflation. The eye of the authorities should be on Inflation at all times, Prudent management of our Oil earnings, adequate savings (Foreign Reserve) and investments as these will help stabilize the fluctuating exchange rate  with its consequent influence on interest rate and economic growth.

scholarly journals Determinant of Private Sector Credit and Its Implication on Economic Growth in Nigeria: 2000-2017

2019 ◽  
Vol 5 (1) ◽  
pp. 10-20
Author(s):  
Olorunmade Gbenga ◽  
Samuel Olusegun James ◽  
Adewole Joseph Adeyinka
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Private Sector ◽  
Money Supply ◽  
Significant Relationship ◽  
Domestic Product ◽  
Total Output ◽  
Growth Equation ◽  
Real Sector ◽  
The Real

The study examined the determinant of private sector credit and its implication on economic growth in Nigeria. The fluctuation in the supply of money and credit is the basic causal factor at work in cyclical process; when money supply falls, prices decrease, profit decrease, production activities become sluggish and production falls and when money supply expands, price rise, profit increase and the total output increases and finally growth takes place. The main objective of this study is to examine the relationship between Private Sector Credit and Gross Domestic Product. Data were obtained from Central Bank of Nigeria statistical bulletin. Simple regression analysis was used to achieve the stated objective. It was revealed in the determinant of credit supply equation 1 that there was significant relationship between Total credits to private sector and money supply in Nigeria. It was also discovered in the Private Sector Credit and Economic Growth Equation 2 that there was significant relationship between private sector credit and economic growth in Nigeria. The study therefore recommends that there should be persistence increase of money supply to Nigerian economy in order to increase the flow of credit to the real sector of the Nigerian economy, financial institutions should distribute more credit to the real sector for productive purposes in order to increase Gross domestic product.

scholarly journals The Effect of Investment, Exports, and Interest Rates on the Gross Domestic Product of the Republic Of Yemen: An Econometric Analysis

2021 ◽  
Vol 2 (3) ◽  
pp. 112-129
Author(s):  
Mohammed Y. AL-Rafik
Keyword(s):  
Interest Rate ◽  
Gross Domestic Product ◽  
Interest Rates ◽  
Significant Relationship ◽  
Statistical Significance ◽  
Secondary Data ◽  
Domestic Product ◽  
Dummy Variable ◽  
Lm Test ◽  
The Republic

Purpose: The study aims to examine the effect of investment, exports, and interest rates on the gross domestic product of the Republic of Yemen. Approach/Methodology/Design: This study is based on secondary data. Data on the gross domestic product, interest rate, gross capital formation were obtained and analyzed using the autoregressive distributed lag (ARDL) technique, Wald test, Serial Correlation LM Test. The data were presented the Findings: The results through the use of the (E-VIEWS) program showed that there is a direct statistically significant relationship at a level of 5% between investment and gross domestic product. This means that if investment increases by 1%, it will lead to an increase in GDP by 28.63%. The result also showed that the dummy variable relationship to the GDP is direct and statistically significant. The level of significance is 5%, that is, by increasing the dummy variable by 1%, it leads to an increase in GDP by 25.13%. As long as the interest rate was on an inverse relationship and statistically significant at a significant level (10%), this means that an increase in interest rates by 1% would lead to a decrease in GDP rates by 19.54%. In addition, there is a positive relationship between exports and GDP and a statistical significance at level 5%. This means that an increase in exports by 1% leads to an increase in GDP by 69.76%. Practical Implications: The investment could be double more than what the results showed in the case of political and economic stability. Improving legislation is also a significant aspect. There is an urgent need to focus on investment in infrastructure. In addition, increasing exports improve the gross domestic product. Based on the results, it is recommended to real invest instead of placing capital in banks as increasing interest rates lead to lower gross domestic output. Originality/value: The analysis indicates that there is a direct statistical and significant relationship between total investment and gross domestic product at a significant level of 5%, as whenever the investment increased by 1%, this led to an increase in the gross domestic product by about 28.63%.

scholarly journals Sectorial Output Growth and Commercial Bank Credit Nexus in Nigeria

2020 ◽  
Vol 1 (1) ◽  
pp. 88-102
Author(s):  
Adedigba Praise Abina ◽  
Emeka Obi
Keyword(s):  
Gross Domestic Product ◽  
Granger Causality ◽  
Commercial Bank ◽  
Service Sector ◽  
Secondary Data ◽  
Output Growth ◽  
Bank Credit ◽  
Domestic Product ◽  
Causality Test ◽  
Production Sector

This study investigates the nexus between sectorial output growth and commercial bank credit in Nigeria. Sectorial output growth was broken down into three different proxies which include production sector, Commercial sector and Service sector contribution to gross domestic product while bank credit to production sector, general commerce and service sector served as the independent variables which are used to proxy commercial bank credit. The study made use of secondary data obtained from Central Bank of Nigeria Statistical bulletin for the period 1981 to 2019. It employed Descriptive Statistics, Phillips-Perron (PP) Unit Root Test, Simple Regression Analysis and Granger Causality Test. The Granger Causality result showed that bi-directional causality is identified in the three models while there were positive and significant relationship between bank credit to production sector, general commerce, service sector and production sector contribution to gross domestic product, general commerce sector contribution to gross domestic product and service sector contribution to gross domestic product respectively. The paper therefore recommends that the regulatory authorities should prioritize more on increasing and easing the requirements needed from deficit spenders to secure credit from commercial banks in Nigeria.

MONETARY POLICY AND FINANCIAL INTERMEDIATION IN BASEL III: GLOBAL TRENDS

2019 ◽  
Vol 4 (3) ◽  
pp. 39-47
Author(s):  
Larysa BATIUK
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Federal Reserve ◽  
Global Economy ◽  
Financial Intermediation ◽  
Macroeconomic Fluctuations ◽  
Basel Iii ◽  
Banking Supervision ◽  
Basel Committee ◽  
Real Wealth

Introduction. The article deals with the peculiarities of the transmission mechanism of monetary policy in the implementation conditions of the Basel Committee requirements on Banking Supervision "Basel III". The problem of the mechanism violation of the classical monetary multiplier, the imbalance of the monetary circulation system, the frequency increase of debt defaults and the amplitude of macroeconomic fluctuations in the global economic system are marked as a study result of the effects of the credit mitigation policy conducted by the US Federal Reserve amid the global financial crises of the last decade and changes in the nature of financial intermediation based on the synthesis of asset securitization and structured finance instruments. The purpose of this article is to investigate changes in monetary policy and financial intermediation in the implementation context of the Basel Committee on Banking Supervision Basel III as a source of imbalance in the global economy. Research methodology. The system method, method of scientific abstraction, methods of analysis and synthesis, statistical, comparison, generalization, scientific prediction were used. Results. The article deals with the implications of implementing the Basel Committee on Banking Supervision Basel I and Basel II in the area of monetary policy and financial intermediation; peculiarities of monetary multiplier mechanism operation in modern conditions are revealed; the possible consequences of implementing Basel III requirements for the mechanism of monetary supply formation in the world economy are analysed; the change in the role of gold as monetary metal in central bank foreign exchange reserves and the implications of these changes in terms of price dynamics and the distribution of real wealth in the global economy are examined. Conclusions. It is proposed to consider the requirements of the Basel Committee on Banking Supervision "Basel III" as such, which will exacerbate the volatility of global financial markets, increase the likelihood of increasing the frequency of debt defaults and, given the possibility of using gold as a means of redistribution of real wealth in the global economy, will cause an increase in the amplitude of macroeconomic fluctuations. Keywords: monetary policy; financial intermediation; the central bank; US Federal Reserve; Basel III; bank capital structure, monetary base; money multiplier, correspondent accounts; money supply; monetary gold; global economy.

Non-banking financial intermediation and phenomena of shadow money in modern economy

2021 ◽  
Vol 27 (8) ◽  
pp. 1694-1709
Author(s):  
Vladimir K. BURLACHKOV
Keyword(s):  
Commercial Banks ◽  
Financial Intermediation ◽  
Banking System ◽  
Banking Regulation ◽  
Developed Countries ◽  
Bank Credit ◽  
Shadow Banking ◽  
Economic Agents ◽  
Shadow Banking System ◽  
Lending Activity

Subject. The article addresses the non-banking financial intermediation (shadow banking system) as it is successfully expanding nowadays both in developed countries and emerging economics. Objectives. The study aims at conducting a comprehensive analysis of the specifics of non-banking financial intermediation, revealing its impact on economic agents’ activities, causes and consequences, and elaborating the methodological framework for effectiveness of modern monetary policy. Methods. I employ methods of scientific abstraction, induction, deduction, synthesis, and comparative analysis. Results. In the modern national economy, along with the money, created by the central bank and commercial banks, there are highly liquid financial instruments called shadow money. The scope of its application is shadow banking (financial intermediation) outside the banking system. The use of shadow money is caused by high demand for credit resources. Conclusions. The high activity of shadow banking and increased turnover of shadow money resulted from a transfer to Basel standards of banking regulation in the 1990s, which affected the lending activity of commercial banks. Under these conditions, the demand for loans provided by non-bank credit and financial institutions increased. The market of non-bank credit products was formed. However, the process of lending in the shadow banking is associated with high risks and non-stability of shadow money, widely used in this sphere.

scholarly journals Empirical Analysis of Non-Performing Loans and Liquidity of Deposit Money Banks: Nigeria Experience

2021 ◽  
Keyword(s):  
Monetary Policy ◽  
Gross Domestic Product ◽  
Capital Adequacy ◽  
Domestic Product ◽  
Loan Loss ◽  
Loan Loss Provisions ◽  
Minimum Capital Requirement ◽  
Small Quantum ◽  
Capital Adequacy Ratio ◽  
Loan Growth

Nigerian Deposit Money Banks (DMBs) tend to have suffered the plight of Non-Performing Loans (NPLs) in recent times in no small quantum. Consequently, a large chunk of them have had to increase their loan loss provisions and this may dwindle their liquidity. This study investigates the effect of non-performing loans on liquidity of Deposit Money Banks (DMBs) in Nigeria. A panel regression analysis was performed on a data of 15 quoted DMBs from 2009 to 2019, in order to examine the correlation between the explained variable (banks’ liquidity) and Non-Performing Loans (NPL) while other explanatory variables- Capital Adequacy Ratio (CAR), Bank Size (BS), Loan Growth (LG), Monetary Policy Rate (MPR), Gross Domestic Product (GDP) and Inflation were taken into consideration. Data were extracted from the banks’ yearly financial statements and the World Bank Financial Statistics. Based on the empirical findings, the study found only four variables-Non Performing Loans, Capital Adequacy Ratio, Bank Size and Inflation significantly related at 5% significant level with banks’ liquidity while the other three; Gross Domestic Product, Loan Growth and Monetary Policy Rate were identified as insignificant. The finding also revealed that NPLs has negative effect on banks’ liquidity while CAR, BS and INF showed positive relationship. The study recommends strict compliance of banks with the NPLs tolerable limit set by the Central bank. It also suggests that the CBN take proactive measure to ensure the banks’ compliance with the minimum capital requirement. Keywords: Banks, Financial Institutions, Liquidity, Non-Performing Loans, Performance

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