Commercial Bank Loans and Real Sector Output in Nigeria: A Comparative Approach

Abstract

This study investigated the relationship between commercial bank loans and real sector output in Nigeria from 1991 to 2018 using a comparative approach. The study employed the Auto Regressive Distributed Lag (ARDL) methodology and found that bank consolidation had a negative and insignificant relationship with the Real Sector Gross Domestic Product (RSGDP) both in the short run and in the long run within the pre and post consolidation period of the study. Thus, the study recommended that it is not enough to consolidate; the Central Bank of Nigeria (CBN) should monitor the activities of Deposit Money Banks (DMBs) and ensure that the real sector of the economy is funded adequately in order to achieve the stated objective of the banking policy