Bank Credit and Economic Growth in a Recessed Economy

Abstract

The study examines the extent to which Bank Credit relates to economic growth in a recessed economy. The objective of the study is to determine the extent of relationship that exist between Bank Credit and economic growth of selected Small Scale Enterprises in Nigeria from 1992 to 2015. The study employs Philip-Peron and Augmented Dickey Fuller Unit Root Test, Johansen Co-integration, OLS regression and Granger Causality. The result of the study revealed that Bank credit to Small Scale Enterprises significantly related to economic growth in the short run and long run. Hence, the study recommends that Bank Credit to Small Scale Enterprises should be increased to grow the economy like the developed economy that thrives on Small Scale Enterprises.

Keywords: Bank Credit, Small Scale enterprises, GDP