Effect of Deposit Money Bank Lending on the Growth of the Private Sector in Nigeria

This study seeks to investigate the effect of deposit money bank lending on the growth of the private sector in Nigeria. Using time series data from 1995 to 2020, the study applied both descriptive statistics and regression analysis to achieve this objective. Descriptive statistics show that the series are typically distributed. In order to check the short-run impact of the variables, the study used an ordinary least square model with the aid of an E-views econometrics package to test the impact among the variables. It was found that deposit money banks' lending has a positive but not significant impact on the manufacturing sector's gross domestic product in Nigeria. Again, it shows that total bank deposits have a positive and significant impact on Nigeria's manufacturing sector gross domestic product. The coefficient of determination R2 is 0.967008, implying that the explanatory variables jointly explained over 96.7% of the total variation in the dependent variable (MGDP). In contrast, the remaining variables are described in other variables that are not included in the model. Meanwhile, the Adjusted R2 also confirms that the model has a goodness of fit. The study, therefore, recommends that the monetary authority (CBN) should focus on initiating and implementing policies that will regulate banks' lending rates so as to forestall unnecessarily high rates that will deter investors.