Effect of Lending Policies on the Financial Performance of Deposit Money Banks (DMBS) in Nigeria

This study investigates the effect of lending policies on the financial performance of Deposit Money Banks (DMBs) in Nigeria. The study explores the effects of central bank policies, deposit sizes, decision-making levels, guarantees, interest rates, and control mechanisms on DMBs' financial outcomes. Drawing from a conceptual framework that highlights the intricate relationship between lending policies, regulatory guidelines, economic factors, and risk management, the study employs a non-probabilistic Quota sampling technique to gather data from 130 Credit Officers across thirteen DMBs listed on the Nigerian Stock Exchange. Using both primary (questionnaires) and secondary data sources, the study employs statistical analyses, including multiple and simple linear regression, to evaluate the hypothesis-driven relationships. Findings reveal significant correlations among policy variables, with nuanced impacts on financial performance. While overall lending policies demonstrate a substantial influence, individual variables such as supervision, decision-making in loan granting, and deposit volume exhibit pronounced effects, leading to recommendations for DMBs to develop efficient lending policies, enhance decision-making processes, utilize technology for credit management, and establish robust control mechanisms.