Effect of Interest Rate Deregulation on Loans and Advances of Deposit Money Banks in Nigeria

Abstract

The study examined the impact of the lending and deposit rates in the face of deregulation on the loans and advances of deposit money banks in the country covering the period of 1986 to 2019 using annual time series data. Using the Autoregressive Distributed Lag (ARDL) model, findings from the study revealed that the deregulation of interest rate in Nigeria encouraged the disbursement of loans and advances within the economy, but it was however not significant. In addition, the study found that the policy led to an inverse relationship between deposit rate and loans and advances in the country. Higher deposit rates significantly discouraged deposit money banks from granting loans and advances. To ensure that interest rate deregulation has a much significant effect on the loans and advances of deposit money bank, the deregulation of the sector must be full, as against the partial deregulation being presently practiced, to encourage the desired level of competition which would spur the growth of the sector, and ultimately expand credit facilities for the Nigerian economy.

A Review of the Effects of Women Literacy and Poverty Reduction on Sustainable Development in Nigeria

“…Todaro and Smith (1985) in Adebayo (2020) aver that sustainable development is the guiding concept for achieving human development goals, according to which it is morally required of the present generation to provide for the basic necessities of their descendants' sustainable living conditions. Meeting everyone's immediate needs and increasing their chances of leading satisfying lives are essential components of sustainable development (Arejiogbe, et.…”