1Professor of Banking and Finance, Nnamdi Azikiwe University, Awka
2Dept of Banking and Finance, Chukwuemeka Odumegwu Ojukwu University, Igbariam, Anambra State, Nigeria
3Dept of Banking and Finance, Ambrose Alli University, Ekpoma, Edo State, Nigeria
The study examines the relationship between Credit to the Private Sector and the performance of the Banking Sector in Nigeria. The study made use of secondary data extracted from Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators. The main variables for the study include the contribution of Financial institutions to GDP, the ratio of credit to the private sector to GDP, the ratio of market capitalization to GDP and the interest rate. The ordinary least square (OLS) multiple regression technique was employed for data analysis and covered a time period of thirty two years from 1986 to 2017. The analysis revealed that bank credit to the private sector and all the other intervening variables did not significantly affect the performance of the banking sector in Nigeria within the period under review. A major recommendation of the study is that the monetary authorities should devise a new system of directives and incentives for banks to mobilize and channel sufficient long term funds to the productive sector of the economy; upgrade the quality of the management, project appraisal, monitoring and collection of debts in order to improve the efficiency of firms, timely recovery of loans and the stability of the banking industry.
Bank credit, Performance of the Banking sector, , Nigeria
