Effect of Bank Lending Rates on the Performance of Nigerian Economy

Abstract

The study portrays the effect of bank lending on the performance of Nigerian economy. The specific objectives were; to examine the relationship between bank lending rate and performance of Nigeria economy and to examine the relationship between inflation and the performance of Nigeria economy. Data were sourced from Central Bank Statistical Bulletin of Nigeria, 2015. Ordinary least square of multiple regression model was adopted to statistically analyze the relationship between dependent and independent variables. The findings revealed that lending rate had a positive effect on the performance of Nigeria economy and inflation positively contributed to the performance of Nigeria economy. The study recommended that there should be a reduction in lending rate by banks in order to enhance rapid growth and development of the economy. Also recommended that a reduction in the reserve requirement increases quantum of cash held by banks and more funds should be available for extension of credit to investors.

Keywords: Inflation Rate, Lending Rate, Gross Domestic Product, Loan pricing Multiple lending