Dynamic Response Analysis of Private Sector Credit Delivery to Variations in Financial Intermediation Costs in Nigeria (Published)
This study investigated the dynamic responses of private sector credit delivery in Nigeria to variations in financial intermediation costs. Ex-Post Facto research design and Panel Vector Auto Regression estimation method were used. Annual panel data for 10years were collected from individual annual reports and financial statements of the selected banks. The dependent variable in the panel data regression model was private sector credit delivery proxied as the ratio of loans and advances to total asset while the independent variables were variations in bank operating cost, loan loss provision and interest rate spread. The study found that the magnitude of the shocks-impact of private sector credit delivery in Nigeria depends on the variations in the level of bank operating costs, loan loss provision and interest rate spread. The implication of the finding is that in subsequent years in the future (3-year period), there will be absence of shocks-impact in the 1st year but there will be presence of shocks-impact of various magnitude in the 2nd and 3rd years respectively. This means that shocks on bank operating costs, loan loss provisions and interest rate spread have no long lasting effect on private sector credit delivery in Nigeria. The study recommends that efforts should be intensified to ensure that shocks in financial intermediation costs (bank operating cost, loan loss provision and interest rate spread) does not adversely affect private sector credit delivery in Nigeria.
Determinants of Financial Intermediation and Its Implications on Economic Growth in Nigeria (Published)
The main objective of this study is to investigate the effect of financial intermediation on economic growth in Nigeria. The study made use of ordinary least square regression analysis. The study shows that interest rate margin has significantly impacted on economic development in Nigeria, that credit to private sector has significantly impacted positive on the development of Nigerian economy and that the level of lending rate over the years has impacted negatively on economic growth in Nigeria. The policy implication is that improper management of financial intermediation will help the economy to develop. This means that there is significant and positive effect of financial intermediation on economic growth in Nigeria. We therefore recommend that Nigerian government should ensure that a component analysis of the real sector of the Nigerian economy be carried out with a view to having a better understanding of the inverse relationship between the loans to the private sector and the performance of Nigerian economy through financial intermediation.