IDEAS home Printed from
   My bibliography  Save this article

Commercial Bank Lending Rates And The Real Sector Of The Nigerian Economy


  • Tokunbo Simbowale Osinubi
  • Akin-Olusoji Akinyele


The financial sector in a typical economy is saddled with the primary responsibilities of financial resource mobilization and intermediation. It engages in the redirection of funds from surplus spending units to deficit spending units. In other words, the financial sector provides funds used as capital input by producers in other sectors of the economy as well as by final consumers. The impact of the delivery of these financial services in the form of working capital to the producers is felt in the short run. Thus, the financial sector, especially the commercial banking system, is important in the smooth functioning of the real sector of the economy. The real sector of the economy forms the main driving force of the economy. It is the engine of economic growth and development.In spite of its importance, however, the performance of the real sector in terms of production and growth rate has been low. Its contribution to GDP, hovering between 45% and 51%, has not made any remarkable increase over the years (Central Bank of Nigeria, 2000). Essentially, the real sector relies on the banking system for working capital with which to purchase inputs locally and abroad. Increases in bank lending rates, therefore, compound the problem of rising cost of working capital, thereby increasing the significance of cost of funds in the performance of the sector. This suggests the need, using secondarily sourced time-series data from 1970 to 2003, to carry out an in-depth study of commercial bank lending rates and its impact on the real sector of the economy. The study is, therefore, important as it is expected to provide useful insights into the probable cause of slow output growth and resource unemployment in the real sector of the Nigerian economy.

Suggested Citation

  • Tokunbo Simbowale Osinubi & Akin-Olusoji Akinyele, 2006. "Commercial Bank Lending Rates And The Real Sector Of The Nigerian Economy," The IUP Journal of Bank Management, IUP Publications, vol. 0(3), pages 27-48, August.
  • Handle: RePEc:icf:icfjbm:v:5:y:2006:i:3:p:27-48

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item


    Access and download statistics


    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:icf:icfjbm:v:5:y:2006:i:3:p:27-48. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (G R K Murty). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.