CREDIT MANAGEMENT IN COMMERCIAL BANKS AND ITS EFFECT ON NIGERIA ECONOMY

ABSTRACT This study is carried out to examine credit management (CM) in the commercial banking and its effect economic growth in Nigeria. The objective of this study is to examine the effect of credit management in the commercial banking sector on the economic growth in Nigeria from 1994 – 202. Using the panel data approach, the study covers the twenty (22) deposit money banks (DMBs) in Nigeria out of which a sample size of ten (10) DMBs were used. The independent variable, commercial Bank credit management was proxy by Bank credit to private sector (CBR), exchange rate (EXCR), interest rate (INTR) and inflation rate (INFR) while the dependent variable, economic growth was proxy by gross domestic product (GDP). The data for statistical analysis were sourced from the central bank of Nigeria (CBN) statistical bulletin. Findings showed CBR have negative insignificant effect on GDP while EXR, has positive insignificant impact on gross domestic product. INTR and INFR have strong positive significant effect on economic growth of Nigeria within a significant level of 0.05. It was therefore concluded that significantly credit management in the banking sector affected economic growth in Nigeria. Based on the conclusion above, the following recommendations were made: the banking sector should endeavor to put in place measures that help increase their volume of credit to the private and government sector to boost productivity; managers of DMBs should employ lending measures that increase their gross domestic product; the bank credit to investors should be strategically managed in such a way that will attract borrowers and as well not having negative effect on the Nigerian economy. Keywords: credit management, bank deposits, credits to the private sector, inflation, exchange rate.