IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v9y2025issue-6p610-626.html

Impact of Bank Lending Rate on Unemployment in Nigeria

Author

Listed:
  • Livinus Mmaduabuchi Okeke

    (Department of Economics, Nnamdi Azikiwe University, Awka Nigeria.)

  • Ebele Stella Nwokoye

    (Department of Economics, Nnamdi Azikiwe University, Awka Nigeria.)

Abstract

Considering the high unemployment rate, available studies for Nigeria are one-sided as they focused only on aggregate unemployment without considering disaggregating unemployment which could provide areas of focus for the monetary policy authority towards tackling unemployment in Nigeria. This study intends to breach this gap by disaggregating unemployment into youth and adult unemployment. This study examines specifically, the impact of banks’ lending rate on youth and adult unemployment rates in Nigeria using annual data from 1981 to 2021. It employed the autoregressive distributed lag technique and estimation procedures under the framework of the Philips curve theory and Taylor’s rule. The data for this study is an annual time series data that covers from 1981 to 2021. The data for the variables were sourced from the Central Bank of Nigeria (CBN) statistical bulletin and the African Development Bank database. The Econometric software for estimation is STATA 17. Results show that banks’ lending had negative and significant impacts on aggregate, and youth unemployment, and negative but insignificant impacts on adult unemployment in the long run. The study concludes that banks’ lending rate affected aggregate, youth and adult unemployment differently. To reduce unemployment in the Nigeria, the monetary authority should implement a tight monetary policy to increase the banks’ lending rate, however, with the youth category in exception.

Suggested Citation

  • Livinus Mmaduabuchi Okeke & Ebele Stella Nwokoye, 2025. "Impact of Bank Lending Rate on Unemployment in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(6), pages 610-626, June.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:610-626
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-9-issue-6/610-626.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/impact-of-bank-lending-rate-on-unemployment-in-nigeria/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bennani, Hamza, 2023. "Effect of monetary policy shocks on the racial unemployment rates in the US," Economic Systems, Elsevier, vol. 47(1).
    2. John B. Taylor, 1995. "The Monetary Transmission Mechanism: An Empirical Framework," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 11-26, Fall.
    3. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    4. Frederick van der Ploeg, 2005. "Back to Keynes?," CESifo Economic Studies, CESifo Group, vol. 51(4), pages 777-822.
    5. Manuel Benazić & Jasmin Rami, 2016. "Monetary policy and unemployment in Croatia," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 29(1), pages 1038-1049, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ben Mimoun, Mohamed & Boukhatem, Jamel & Raies, Asma, 2024. "Aggregate demand and inflation response to monetary policy shocks in Tunisia," Journal of Policy Modeling, Elsevier, vol. 46(3), pages 592-612.
    2. Tafajul Hossain & Biswajit Maitra, 2020. "Monetary Policy, Trade Openness and Economic Growth in India Under Monetary-targeting and Multiple-indicator Approach Regimes," Arthaniti: Journal of Economic Theory and Practice, , vol. 19(1), pages 108-124, June.
    3. Amara Priscilia Ozoji & Chika Anastesia Anisiuba & Chinwe Ada Olelewe & Imaobong Judith Nnam & Chidiebere Nnamani & Ngozi Mabel Nwekwo & Arinze Reminus Odoh & Geoffrey Ndubuisi Udefi, 2025. "Towards Climate-Resilient Agricultural Growth in Nigeria: Can the Current Cash Reserve Ratio Help?," Sustainability, MDPI, vol. 17(13), pages 1-28, June.
    4. Oparah Felix Chukwudi & James Tumba Henry, 2020. "Monetary Policy and Financial Stability in the Nigerian Banking Industry," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(1), pages 82-114, January.
    5. Mohammed Modu & Mustapha M.Kime & Buba M. Yunusa, 2023. "Analysis of Monetary Policy and Economic Growth in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(10), pages 319-334, October.
    6. repec:afa:wpaper:aesriwp06 is not listed on IDEAS
    7. Karasoy, Alper, 2022. "Is innovative technology a solution to Japan's long-run energy insecurity? Dynamic evidence from the linear and nonlinear methods," Technology in Society, Elsevier, vol. 70(C).
    8. Flavio Vilela Vieira & Cleomar Gomes Da Silva, 2018. "Brics Export Performance: An Ardl Bounds Testing Empirical Investigation," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 101, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    9. Zhang, Junjie & Yu, Shiwei & Hu, Yundie & Hu, Xing & Zhang, Wenqing, 2025. "Impact of China's renewable energy product exports on host countries' energy transition R&D: The role of population aging," Energy Economics, Elsevier, vol. 144(C).
    10. Bruce Morley, 2009. "A Comparison of Two Alternative Monetary Approaches to Exchange Rate Determination over the Long-Run," International Econometric Review (IER), Economic Research Association, vol. 1(2), pages 63-76, September.
    11. Asadov, Alam & Masih, Mansur, 2016. "Home financing loans and their relationship to real estate bubble: An analysis of the U.S. mortgage market," MPRA Paper 69771, University Library of Munich, Germany.
    12. Muhammad AJMAIR & Khadim HUSSAIN & Sabahat AKRAM & Ambreen ZEB, 2017. "What determines the growth of services sector in Pakistan? A comparison of ARDL bound testing and time varying parametric estimation with general to specific approach," Turkish Economic Review, KSP Journals, vol. 4(3), pages 308-319, September.
    13. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    14. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2015. "Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution," Economic Modelling, Elsevier, vol. 44(C), pages 104-115.
    15. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    16. Noraida, A.W. & Abdul-Rahim, A.S. & Othman, Mohd, 2017. "The Impact of Sustainable Forest Management (SFM) Practices on Primary Timber-Based Production in Peninsular Malaysia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 51(2), pages 143-154.
    17. Balazs Egert & Carol Leonard, 2008. "Dutch Disease Scare in Kazakhstan: Is it real?," Open Economies Review, Springer, vol. 19(2), pages 147-165, April.
    18. Georgios Bertsatos & Plutarchos Sakellaris & Mike G. Tsionas, 2022. "Correction to: Extensions of the Pesaran, Shin and Smith (2001) bounds testing procedure," Empirical Economics, Springer, vol. 62(2), pages 635-635, February.
    19. Naseem, N.A.M & Tan, Hui-Boon & Hamizah, M.S, 2008. "Exchange Rate Misalignment, Volatility and Import Flows in Malaysia," MPRA Paper 41571, University Library of Munich, Germany.
    20. Arash Habibi, 2019. "Non-linear impact of exchange rate changes on U.S. industrial production," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-17, December.
    21. Md.Yousuf & Raju Ahmed & Nasrin Akther Lubna & Shah Md. Sumon, 2019. "Estimating the Services Sector Impact on Economic Growth of Bangladesh: An Econometric Investigation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(2), pages 62-72, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:610-626. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.