Sectoral distribution of commercial banks’ credit and economic growth in Nigeria
Year: 2025
Type: article
Abstract: The persistent economic challenges have prompted investigation about the effectiveness of commercial banks’ credit in driving economic growth in Nigeria. The main objective of this paper is to determine the relationship between commercial banks’ credit distributed to the various sectors and economic growth in Nigeria from 2014q1 to 2023q4 using autoregressive distributed lag (ARDL) bounds test approach. The Central Bank of Nigeria (CBN) Statistical Bulletin is the secondary source from where the data for the study were collected. The theoretical framework of the study is finance-led growth hypothesis. The commercial banks’ credit distributed to production and general commerce sectors had a positive relationship with economic growth in Nigeria. The commercial banks’ credit distributed to government and services sectors had a negative relationship with economic growth in Nigeria. A higher percentage of commercial banks’ credit should be distributed to production and general commerce sectors than government and services sectors in order to achieve a sustainable economic growth in Nigeria. Keywords: Institutions, Economic Growth, ARDL Model, Nigeria.
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4409074795