IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 5 NO. 2 2019

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A Long-Term Assessment of Bank Credit Allocated to the Nigerian Private Sector in an Era of Privatization and Commercialization

Gbalam Peter Eze (PhD)

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Abstract

The study dealt on the effect of privatization on performance in a panel of Nigerian banks for the period 1988–2017 (a 30-year period). Despite nine banks being privatized the banks credit to the private sector has not met the target of the proponents of the policy makers who started the privatization programme in the first place. The research seeks to establish if there is a valid argument in the belief held in some quarters that privatization of government businesses and assets which facilitate economic growth have not had significant effect on the credit facilitation of the private sector. In the process of developing of the model the first step is to identify the linear regression model requiring the inclusion of the dependent and independent variable and the attendant coefficient weights identified by using statistical method called Ordinary Least Squares (OLS), Granger causality test and Unit root test. There was a positive correlation between credit to the private sector and Gross Domestic Product (GDP) at current prices (R = 0.98). This indicates that 1% incease in CPS also increase GDP at current prices by 98%. It is recommended that the monetary authorities can grow the economy better by putting more policies that aid the real sector which is private sector driven by channeling more credit to the SMEs

keywords:

Long-term, bank credit, Nigerian private sector, privatization and commercialization

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