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Omodero, Cordelia and Osariemen, Asiriuwa and Iyoha, F. O. (2021) BANK LENDING TRANSACTION AND FINANCIAL SYSTEM CONTROLS IN AN EVOLVING ECONOMY. Academy of Strategic Management Journal, 20 (5). ISSN 1939-6104

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Fund availability for private sector operations is determined by a nation’s financial system under the control of the Central Bank. The private sector investment and operations depend on the amount of funds accessible by the operators. Bank credit to the private sector is indispensable in every functioning economy to remain viable. To a considerable extent, private sector credit plays a significant role in ensuring the economic stability of a nation. In Nigeria, the scenario is the same. Thus, this study examines the extent to which monetary policy instruments affect the lending power of banks, especially to the major beneficiaries who are the private sectors. The study applies the relevant econometric techniques, which include a test of validity, normality and stability of the model used. The ordinary least squares method is employed to test the causality effect of the financial policy instruments on private sector credit. The study covered a period from 1998 to 2019. The findings indicate that interest and exchange rates are positively insignificant in affecting the credit banks provide to the private sector. The study also finds that money supply significantly and positively influences private sector credit. The study recommends that the money supply should be watched to avoid excess money in circulation while ensuring sufficient credit availability to the private sector for operations.

Item Type: Article
Uncontrolled Keywords: Bank Policy, Money Supply, Monetary Policy, Financial System Controls.
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: nwokealisi
Date Deposited: 29 Sep 2022 12:05
Last Modified: 29 Sep 2022 12:05

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