Commercial Banks Credit and the Performance of Real Sector in Nigeria: 1990-2017

2020 ◽  
pp. 1-15
Keyword(s):  
Central Bank ◽  
Commercial Banks ◽  
Agricultural Sector ◽  
Manufacturing Sector ◽  
Bank Lending ◽  
Real Sector ◽  
Agricultural Credit ◽  
The Real ◽  
Scientific Discussion ◽  
The Cost

The study examined the arguments and counterarguments within the scientific discussion on commercial banks credit and the performance of real sector in Nigeria. The main objective of the study is to examine the effect of commercial banks credit on the performance of the real sector in Nigeria.Data was sourced from Central Bank of Nigeria Statistical Bulletin. A systematization literary approach for data analysis was Regression Analysis. Findings revealed that bank credit and bank lending rate does not have significant impact on real sector performance in Nigeria. It was showed that there was a positive and significant relationship between agricultural credit guarantee scheme fund and agricultural production in Nigeria. The study therefore recommends that banks should be directed to channel their credits towards the real sector to facilitate overall economic growth and development in Nigeria. It was recommended that there is the need policies that will favor the revamp of the agricultural sector in Nigeria should be given pride of place. Also, monetary authority through the Central Bank of Nigeria should create adequate policies and strategies towards deepening of the financial sector and reducing the cost of credit/loans so as to enhance productivity and consequently enhance the growth of the key sectors of economy such as manufacturing sector.

scholarly journals The Future of Banking System and Economic Development in Nigeria

2015 ◽  
Vol 20 (1) ◽  
Author(s):  
Olu Ajakaiye ◽  
M. Adetunji Babatunde
Keyword(s):  
Economic Development ◽  
Business Model ◽  
Commercial Banks ◽  
Banking System ◽  
Bank Lending ◽  
Real Sector ◽  
The Real ◽  
Access To Credit ◽  
The Future ◽  
Banking Business

This study examined the future of banking system and economic development in Nigeria in the context of the demand following hypothesis. Although, the Nigerian economy has witnessed steady growth, the productive base of the economy is narrow. This therefore requires that banks must engage in an effective financial intermediation process to aid the transformation of the real sector as an engine of growth. However, while the deposits mobilized and assets base of the commercial banks has increased in leap and bounds, the real sector access to credit is on the decline. Rather, the bulk of the funds are invested on government short term securities given their risk free characteristics which reflect the lazy bank syndrome. Prohibitively high cost of credit and existence of hidden charges also inhibit real sector access to commercial banks loan. Hence, to reconnect the banking system with the real sector, there is a need to discourage armchair banking business model and encourage supportive banking business model, lending and secure appropriate maturity profile of loans to the real sectors, promote modified collateral bank lending model, and encourage specialization of bank branches. These are expected to aid the growth of the real sector and fast track the process of economic development in Nigeria.

Monetary Policy and Commercial Bank Lending to the Real Sector in Nigeria: A Time Series Study

2018 ◽  
Vol 2 (1) ◽  
pp. 10-41
Author(s):  
Ogolo . ◽  
Tamunotonye Magnus
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Commercial Banks ◽  
Bank Lending ◽  
Real Sector ◽  
Treasury Bill ◽  
The Real ◽  
Negative Effect

This study empirically examined the effects of monetary policy on commercial banks lending to the real sector from 1981 – 2014. The objective was to examine the effectiveness of monetary policy in channeling bank credit to the real sector. Annual time series data were sourced from Central Bank of Nigeria statistical bulletin. Two multiple regression models were specifically estimated with the aid of Software Package for Social Sciences. The study modeled commercial banks credit to agricultural and manufacturing sector as the function of interest rate, monetary policy rate, treasury bill rate, exchange rate, broad money supply and liquidity ratio. The result shows collinearity that corresponds with the Eigen value condition index, and variance constant are less than the required value. The Durbin Watson statistics shows the absence of multiple auto correlation and negative autocorrelation, while the variance inflation factors indicate the absence of auto-correlation. The regression results from model one found that interest rate, monetary policy rate have positive relationship with commercial banks lending to the agricultural sector while Treasury bill rate, exchange rate, broad money supply and liquidity ratio have negative effect on the dependent variable. Model two found that interest rate, Treasury bill rate, exchange rate, broad money supply and liquidity ratio have negative effect on commercial banks lending the manufacturing sector while monetary policy rate have positive relationship with the dependent variable. We recommend that monetary policy should be harmonize with bank lending objectives to enhance commercial banks lending to the real sector of the economy and that management of commercial banks should formulate policies of managing the negative effect of monetary policy variables on its lending.

scholarly journals «Fight against Inflation» and Problem of Investment Process in Our Country

2018 ◽  
Vol 9 (2) ◽  
Author(s):  
Galina Makarova
Keyword(s):  
Central Bank ◽  
Commercial Banks ◽  
Banking System ◽  
Real Sector ◽  
Russian Government ◽  
The Real ◽  
Russian Economy ◽  
Downward Pressure ◽  
Investment Process ◽  
Stimulation Of

The article examines the fact of chronical investment crisis in the real sector of the Russian economy and considers the main directions of anti-inflation policy of the Central Bank of Russia (CB) which exert downward pressure on the investment process in the country (understated amounts of the money supply that do not provide the real needs of the commodity circulation; almost non-regulated spillover from real sector into the financial gambling; non-working function of the banking system in transformation of savings into investments; ambiguity of the CB status and an increased level of ambiguity for Russian investors; mass closing of domestic commercial banks and stimulation of the inflow of foreign ones; lengthy ignorance of of possibilities of using emission means of financing investment processes in the country). The article gives acritical estimation of the success gained by CB in fight against inflation during the crisis period of 2013-2017. It examines two possible scenarios of CB activity reorganization depending on possible evaluations of this activity by the Russian government.

scholarly journals Imbalances in the Capital of Credit Institutions as a Source of Instability in the Economy and in the Market of Loans Issued to Subjects of the Real Sector of the Economy

2021 ◽  
Vol 93 ◽  
pp. 02032
Author(s):  
M.S. Maramygin ◽  
E.V. Strelnikov ◽  
S.Y. Arzumanyan
Keyword(s):  
Commercial Banks ◽  
Agricultural Sector ◽  
Industrial Complex ◽  
Real Sector ◽  
Credit Institution ◽  
Loan Portfolio ◽  
Balance Sheets ◽  
The Real ◽  
Loan Market ◽  
The Stability

In the present paper, the study of imbalances in the capital structure of some Russian banks is carried out. The very imbalances in the structure of commercial banks have a significant impact on the dynamics of the entire banking and loan market in the country. And in particular, the dynamics of the development of the agricultural sector. The study of the uneven structure of the balance sheets of commercial banks allowed us to draw conclusions. First, the uneven balance of the bank can be expressed both in a positive and negative plane, depending on the size of the capital imbalance, it can be concluded that the size of the imbalance is naturally dependent and the effect of influence on the dynamics of the formation of reserves for the loan portfolio. Second, analysis of various operations of commercial banks, in particular the analysis of banking operations, transactions of a credit institution and other transactions allows us to divide the services of the Bank for various type of clients from significant to insignificant to have an impact on possible alleged imbalance in the Bank, which can affect the imbalance in the lending industry for the real sector of the economy, particularly the imbalances in lending to agribusiness. The cumulative growth of these imbalances in several banks can lead to an unstable situation in the loan market. The fight against possible imbalances in the capital of banks can lead to an increase in the stability of the loan market and the stability of the entire economic system as a whole. This will stabilize the market of loans to the real sector of the economy and the market of loans issued within the framework of the agro-industrial complex.

scholarly journals Agriculture Sector Credit and Output Relationship in Nepal

2020 ◽  
pp. 33-53
Author(s):  
Arjun Kumar Dahal ◽  
Khagendra Kumar Thapa
Keyword(s):  
Commercial Banks ◽  
Agricultural Sector ◽  
Least Squares Method ◽  
Manufacturing Sector ◽  
Agriculture Sector ◽  
Industrial Sectors ◽  
Long Run ◽  
Integration Test ◽  
The Government ◽  
The Impact

Purpose: The purpose of this study is to find out the condition of priority of commercial banks to provide loans to the agricultural sector and to find the relationship and impact of agricultural loans to the agricultural GDP of Nepal. Objectives: This study aims to compare the condition of loan disbursements in agricultural and manufacturing sectors. It further aims to compare loan percent with growth and contribution to the GDP of the agricultural and industrial sectors and tries to show the impact of agricultural loans to the agricultural GDP of Nepal. Methods: It was based on a descriptive and analytical research design. Statistical tools standard deviation, correlation, regression, etc. are used and Excel, and EViews software are used for the statistical calculations. Statistical calculations and graphs are simultaneously used to show and compare the condition of variables. Results: Commercial banks give higher priority to the manufacturing sector for loans than the agricultural sector. The Johansen Co-integration test indicates no long-run relationship between loans of commercial banks and agricultural output in Nepal. However, the least-squares method, it indicates that a positive causal relationship between agricultural loans and agricultural growth. Implications: The loans of commercial banks directly stimulate the growth of agriculture but the amount of growth is less noticeable. Thus, it is concluded that the commercial bank's loan alone cannot affect and control the growth of the agricultural sector of the Nepalese economy therefore the government should increase its expenditure on the agricultural sector.

scholarly journals Modeling the impact assessment of agricultural sector on economic development as a basis for the country’s investment potential

2019 ◽  
Vol 16 (3) ◽  
pp. 229-240
Author(s):  
Alina Bukhtiarova ◽  
Arsen Hayriyan ◽  
Victor Chentsov ◽  
Sergii Sokol
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Agricultural Sector ◽  
Negative Impact ◽  
Manufacturing Sector ◽  
Value Added ◽  
The Cost ◽  
The Impact

In the context of countries integration into the world economic space, agricultural sector is one of the priorities and strategically important sectors of the national economy. Development of instruments aimed to increase investment potential of this sector is therefore an important component of the country’s economy growth. The article proposes a science-based model of the impact of the agricultural sector on the economic development level of countries trying to move towards European integration.It was found that the employment rate (+58.4) has the largest influence on the rate of GDP change in the studied group of countries (Ukraine, Moldova, Georgia, Armenia). The impact of the gross value added of the manufacturing sector on its economic growth is positive (+44.6). The negative foreign direct investment ratio in the model (–40.3) may be due to the fact that the indicator in the studied countries is still largely influenced by the intervention of the state mechanism, significant uncertainty and risk, which is a deterrent to the overall economic development. An important result of the study was that foreign direct investment had a negative impact on economic growth in developing countries. Further development of the investment potential of a country’s agricultural sector provides for a radical acceleration of scientific and technological progress and, on this basis, a reduction in the cost of a unit of agricultural products and food and an increase in their competitiveness in the domestic and world markets.

An econometric analysis of electricity consumption and real sector performance in Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Isaac Chitedze ◽  
Chukwuemeka Cosmas Nwedeh Nwedeh ◽  
Adenikinju Adeola ◽  
Donald Chidera Chidera Abonyi
Keyword(s):  
Time Series ◽  
Power Supply ◽  
Manufacturing Sector ◽  
Electricity Consumption ◽  
Policy Implications ◽  
Series Data ◽  
Real Sector ◽  
Content Type ◽  
The Real ◽  
Sector Performance

Purpose The purpose of this paper is to examine the extent at which electricity consumption (EC) has contributed to real sector performance, to identify energy-dependent sectors of the economy for appropriate sector-specific policy interventions and to avoid energy conservation policies that may retard the growth of the real sector and economic growth in general. Design/methodology/approach This paper used time series data, covering the period between 1981 and 2015. Various time series econometric analyses such as unit root test for stationarity and vector autoregressive and vector error correction models were used to establish the long-run and short-run co-integration relationship among the variables. Findings This study finds that EC displays a little and insignificant impact on manufacturing sector output, as well as agriculture and service outputs. The empirical result from causality test suggests a unidirectional causality running from agriculture to EC, as well as service sector to EC, whereas bidirectional causality runs between EC and manufacturing sector. This study therefore recommends adequate power supply to the manufacturing sector, while energy efficiency policy and regulatory reform should address agriculture and service sectors. Originality/value Few studies have examined the impact of EC on disaggregated gross domestic product. This research gap has strong policy implications on Nigerian economy as the output of real sector plays vital role in driving the economy. Given the pressing needs for Nigeria to boost real sector output and be among the world’s 20 largest economies by 2030, it becomes imperative for this sector-specific research to be conducted to ensure that sectoral purpose-driven energy interventions are formulated to address power supply challenges in the real sector.

Lending to Private Borrowers and Other Private Assets

2019 ◽  
pp. 108-135
Author(s):  
Ulrich Bindseil
Keyword(s):  
Eighteenth Century ◽  
Central Bank ◽  
Commercial Banks ◽  
Recent Literature ◽  
Bank Lending ◽  
Central Banks ◽  
Central Banking ◽  
Time Section ◽  
Economic Rationale ◽  
The Subject

This chapter recalls the economic rationale of central bank lending to private borrowers (Section 4.1) and argues that the recent literature has often underestimated the importance of such lending by early central banks, without this implying that central banks were really competing with ‘commercial’ banks (Section 4.2). Finally, it illustrates pre-eighteenth-century awareness of the subject by reviewing the literature of the time (Section 4.3). Lending of central banks to private borrowers had a number of advantages relevant as of the first centuries of central banking: (1) providing an option for granular asset diversification and expansion, allowing thereby also to increase the monetary base; (2) generating income with limited risks; (3) improving the availability and pricing of loans for private debtors; (4) anchorizing the central bank in society. Lending to private borrowers took in particular the form of Lombard and discount operations.

Теоретичні аспекти сутності банківського кредиту та особливості кредитних відносин в аграрному секторі економіки

Ekonomika APK ◽  
2021 ◽  
Vol 319 (5) ◽  
pp. 101-112
Author(s):  
Iryna Tomashuk
Keyword(s):  
Agricultural Sector ◽  
Bank Lending ◽  
Practical Significance ◽  
Agricultural Credit ◽  
Economic Relations ◽  
Agricultural Enterprises ◽  
Theoretical Substantiation ◽  
Analysis And Synthesis ◽  
Banking Institutions ◽  
The Impact

The purpose of the article is to study and comprehend the essence of credit as a basic economic category and identify the features of bank lending in the agricultural sector of the economy. Research methods. In the process of research a number of methods were used: abstract-logical - for structuring and theoretical substantiation of the essence of the categorical apparatus of credit and credit relations; methods of comparative analysis and synthesis - to study the evolutionary aspects of credit development and credit relations in society; monographic - in identifying and systematizing the characteristics of credit relations in the agricultural sector of the economy; structural and functional approach for the formation of a conceptual vision of credit as an economic category and providing the specifics of the system of bank lending to agricultural enterprises; graphic - to illustrate and systematize the results of the study. Research results. The ambiguity of the interpretation of the credit category in the modern economic literature is revealed. It is proposed to consider the loan as a system of organizational and economic relations between the lender and the borrower, legally enshrined in the loan agreement, on the provision of funds for temporary use on terms of payment, maturity, intended use, security and return. The dualistic nature of credit efficiency is identified and analyzed. The fundamental nature of the impact of the specifics of agriculture on credit relations in the agricultural sector of the economy is assessed. The legitimacy of the existence of a separate mechanism of credit relations in the agar sector of economies is proved. The essential characteristics and features of agricultural credit are systematized and the priority features of objects of crediting in agriculture are covered. Scientific novelty. Theoretical aspects of structuring the interpretation of the essence of credit and credit relations have been further developed. Substantiation of structural components and features of bank lending of the agar sector of the economy. Practical significance. The results of the study can be used by public and sectoral authorities, as well as banking institutions in developing measures to enhance lending to the agricultural sector of the economy. Tabl.: 1. Figs.: 3. Refs.: 31.

scholarly journals CURRENT STATE OF ENTREPRENEURIAL ACTIVITY OF UKRAINE

2020 ◽  
Author(s):  
Halina Koshelek ◽  
Keyword(s):  
Value Chain ◽  
Retail Trade ◽  
Cost Structure ◽  
Entrepreneurial Activity ◽  
Positive Trend ◽  
Real Sector ◽  
The Real ◽  
Industrial Enterprises ◽  
Doing Business ◽  
The Cost

Carrying out business activities, enterprises ensure the development of the modern economy of the country, form the budget of different levels. Entrepreneurship itself forms an effective management system, is a requirement for achieving economic growth. The result of entrepreneurial activity is to make a profit. It is worth noting that experts provide contradictory assessments of the development of entrepreneurship in Ukraine. In the international ranking of ease of doing business Doing business-2020, Ukraine has taken 64th place, rising by 7 positions and improving 5 of the 10 key indicators. According to general statistics, there is a positive trend of growth of economic entities in recent years, but it does not provide growth in sales, this growth is accounted for by enterprises. It is self-employed entrepreneurs, who are the driving force of any country's economy, a means of overcoming the problems of low solvency and unemployment in the country. In the structure of economic entities in Ukraine by type of economic activity, the number of wholesale and retail trade enterprises and enterprises engaged in information and telecommunication activities is growing year after year, but the number of construction enterprises, transport enterprises, industrial enterprises, and agricultural enterprises is decreasing. The analysis of the cost structure by economic elements of Ukrainian enterprises showed that in general the largest share in the cost structure of business entities in Ukraine for the period from 2012 to 2019 is occupied by material costs. That is, the production of products (goods, services) is material-intensive and the country does not introduce innovative technologies. Due to the industrialization of the real sector of the economy, especially in manufacturing, the country has lost the complex types of production that provided the value chain. The result of such losses was the loss of entire sectors of complex exports and the stagnation of the real sector of the economy. As a result of provided research, it can be noted that there are certain problems in the country for the development of entrepreneurship, which is a special type of activity. The state should support small and medium-sized businesses in the country because entrepreneurship itself is a powerful "locomotive" that will make it possible to ensure proper growth of production and welfare. The prospect of further research should be the study of business engineering as a modern management technology that can significantly accelerate the reform of the domestic economy on a market basis.

Sign in / Sign up

Export Citation Format

Share Document