IDEAS home Printed from https://ideas.repec.org/a/pkp/ijobem/v6y2019i1p49-60id1207.html
   My bibliography  Save this article

Sectoral Credit Allocation of Deposit Money Banks and Poverty Reduction in Nigeria

Author

Listed:
  • Monogbe Tunde G
  • Achugbu Austin
  • Uzowuru Lawrence N
  • Edori Daniel S

Abstract

The nature of relationship between deposit money banks loan to certain sector of the economy and its possible effect of reducing poverty rate in Nigeria is controversial and significant. As such, this study set out to examine the extent to which deposit money bank loan and advances to SMEs, agricultural, and manufacturing sectors in Nigeria has helped in reducing poverty rate. To achieve the objective of the study, unit root test, auto regressive distributive lag estimate and causality test were employed. Result shows that deposit money bank loan to SMEs and agricultural sector seem to be inversely related to poverty rate in Nigeria while sectoral allocation to the manufacturing sector is not capable of reducing poverty rate in Nigeria. This inherent relationship between loans to manufacturing sectors and poverty reduction in Nigeria could be attributed to some structural factors cited in the body of the paper. In the light of these findings, this study concluded that (i) Poverty rate in Nigeria is significantly sensitive to deposit money bank credit to agricultural sector; (ii) Within the context of the study, deposit money bank allocation to SMEs has helped in reducing poverty rate in Nigeria to the tune of 1.821 unit. On this premises, it is recommended that bank ordinances and financial institution act should be review to ensure that more credit is allocated to agricultural and SMEs sector as this will help in reducing the ever teaming trend of poverty in Nigeria through the window of job creation.

Suggested Citation

  • Monogbe Tunde G & Achugbu Austin & Uzowuru Lawrence N & Edori Daniel S, 2019. "Sectoral Credit Allocation of Deposit Money Banks and Poverty Reduction in Nigeria," International Journal of Business, Economics and Management, Conscientia Beam, vol. 6(1), pages 49-60.
    • Handle: RePEc:pkp:ijobem:v:6:y:2019:i:1:p:49-60:id:1207
    as

    Download full text from publisher

    File URL: https://archive.conscientiabeam.com/index.php/62/article/view/1207/1699
    Download Restriction: no
    File URL: https://archive.conscientiabeam.com/index.php/62/article/view/1207/5011
    Download Restriction: no
    ---><---

    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:pkp:ijobem:v:6:y:2019:i:1:p:49-60:id:1207. 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.

    We have no bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dim Michael (email available below). General contact details of provider: https://archive.conscientiabeam.com/index.php/62/ .

    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.