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Determinants of Commercial Banks’ Lending Behavior in Nigeria

Olokoyo, F. O. (2011) Determinants of Commercial Banks’ Lending Behavior in Nigeria. International Journal of Financial Research, 2 (2). pp. 61-72. ISSN 1923-4031 (online)/ 1923-4023 (print)

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This study investigated the determinants of commercial banks’ lending behaviour in the Nigerian context. The study aimed to test and confirm the effectiveness of the common determinants of commercial banks lending behaviour and how it affects the lending behaviour of commercial banks in Nigeria. The model used is estimated using Nigerian commercial banks loan advance (LOA) and other determinants or variables such as their volume of deposits (Vd), their investment portfolio (Ip), interest (lending) rate (Ir), stipulated cash reserve requirements ratio (Rr) and their liquidity ratio (Lr) for the period; 1980 – 2005. The model hypothesizes that there is functional relationship between the dependent variable and the specified independent variables. From the regression analysis, the model was found to be significant and its estimators turned out as expected and it was discovered that commercial banks deposits have the greatest impacts on their lending behaviour. The study then suggests that commercial banks should focus on mobilizing more deposits as this will enhance their lending performance and should formulate critical, realistic and comprehensive strategic and financial plans.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Law, Arts and Social Sciences > School of Management
Depositing User: Mrs Felicia O. Olokoyo
Date Deposited: 20 Oct 2011 22:47
Last Modified: 13 Dec 2011 21:14

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