Effects of Internet Banking on Growth of Access to Loans of Deposit Money Banks in Nigeria

Abstract

The study analyzed the effects of internet banking payments system innovations on the growth of access to loans of deposit money banks (DMB) in Nigeria using annual data from 2004 to 2021 proxies by mobile banking/payment and electronic/internet payment as internet banking payment system and total loans disbursement of DMB as proxy of growth of access to loans. Studied variables were sourced from various issues of the Central Bank of Nigeria Statistical Bulletin. Econometric test of ordinary least square was employed to explain the degree of relationship among mobile banking/payment, electronic/internet payment and total loans disbursement of DMB in Nigeria. The regression test involved student t-test for individual significant level, f-test for overall significant of the model, R-square test for contributive effect of the explanatory variables and Durbin Watson test for autocorrelation test. Evidence from these tests indicated that the variables passed through these tests and proved unbiased. The result connoted that all internet payment systems and mobile payment systems have a positive and significant effect on total loan disbursement of DMB by 30.82% and 69.79% respectively. Hence, based on the empirical and statistical discoveries, the main finding is that internet banking systems influence total loan disbursement of DMB directly and significantly.