DMBs Credit Disbursements and Real Sector Financial Performance in Nigeria

he study examines the impact of DMBs credit disbursements and real sector financial performance in Nigeria over the period from 1994 to 2023. The credit sources considered were; commercial banks, though study extended its insights into merchant banks, microfinance banks, and development banks and how they influenced classified sectors like; the agricultural, industrial, and service sectors. The study employed secondary data gotten from the CBN statistical Bulletin. The study employed an Autoregressive Distributed Lag (ARDL) estimation. The findings reveal that the R-squared values vary significantly across models, indicating differing levels of predictive accuracy. The agricultural sector shows the highest R-squared value of 0.9981, suggesting that credit from these institutions has a substantial impact on this sector’s contribution to GDP. Conversely, the industrial sector exhibits the lowest R-squared value of 0.9907, indicating a lesser degree of predictability and impact from credit types. The service sector demonstrates an intermediate R-squared value of 0.9910, reflecting a moderate level of influence from financial credit. The findings indicate varied effects of different types of credit on sectoral contributions. Commercial banks’ credits did not significantly influence the agricultural sector but showed a significant positive impact on the service sector. In contrast, merchant banks’ credits had a significant effect on both the agricultural and service sectors, while their impact on the industrial sector was not significant. Microfinance banks’ credits demonstrated a marginally significant impact on the agricultural sector but had no significant influence on the industrial and service sectors. Development banks’ credits did not significantly affect the agricultural or industrial sectors but had a significant positive impact on the service sector. Based on these findings, the study recommends that commercial banks focus on increasing credit support to the service sector to sustain its contribution to GDP. Merchant banks should enhance their credit support to the agricultural sector to leverage its potential for economic growth. Microfinance banks are encouraged to refine their lending strategies to better impact the agricultural sector, possibly through targeted programs that address specific needs of small-scale farmers. Development banks are advised to continue their support to the service sector, ensuring that credit interventions are aligned with sectoral growth objectives. Keywords: DMBS, Commercial Bank Credits; Real sector; Nigeria.