0704-883-0675     |      dataprojectng@gmail.com

Commercial Banks‟ Pricing of Loans, Assets Quality and Financial Intermediation in Nigeria

  • Project Research
  • 1-5 Chapters
  • Abstract : Available
  • Table of Content: Available
  • Reference Style: APA
  • Recommended for : Student Researchers
  • NGN 3000

Abstract

Despite the interest rate liberalization policy that gave rise to commercial banks’ pricing of loans models which is expected to enhance quality of banks assets and improve financial intermediation, poor assets quality of banks, bank failures and poor intermediation role of banks are still prevalent in Nigeria. Therefore, the focus of this study is to estimate commercial banks’ pricing of loans model and use the model to evaluate assets quality of banks and level of financial intermediation in Nigeria since the financial liberalization reforms of 1986 - 2002. Based on a sample of nine Deposits Money Banks (DMBs) with data sourced from their annual balance sheet and income statements of accounts from 2002 – 2016, the study used one-way fixed effect Least Squares Dummy Variable (LSDV) model to estimate the banks’ pricing of loans model. The estimated LSDV parsimonious model revealed R2 of 0.60 for the ‘low risk’ credit market. Most significant is the revelation that the coefficient of the credit risk variable is significantly negative in the ‘low risk’ and ‘high risk’ credit markets, contrary to the a priori theoretical expectation. This finding shows that the DMBs underprice credit risk to ‘buy’ market share in the spirit of relationship banking with support from non-interest income (fee–based products) that evolved due to product innovations brought about by financial liberalization. These attitudes of the DMBs are in response to stiff competition provoked by financial liberalization which has adverse consequences for assets quality of banks that deteriorated and successively led to bank failures, high cost banks bailouts and low level of financial intermediation, with financial disintermediation and ‘inverted intermediation’ militating against economic growth. This study, therefore, recommends that Central Bank of Nigeria (CBN) should up-step its focus on prudential regulations with greater emphasis to macro-prudential regulations to enhance assets quality of banks, reduce bank failures and improve financial intermediation for economic growth.




FIND OTHER RELATED TOPICS


Related Project Materials

STRATEGIES FOR PROMOTING LIFELONG LEARNING AMONG VOCATIONAL GRADUATES

Abstract: Promoting lifelong learning among vocational graduates is essential for ensuring...

Read more
AN ANALYSIS OF BUSINESS ENVIRONMENT ON THE SUCCESS AND GROWTH OF THE ORGANISATION

Background to the study

Business refers to any commercial or economic activity that is focused on maximizing profit for...

Read more
CREDIT MANAGEMENT AND INCIDENCE OF BAD DEBTS IN NIGERIA COMMERCIAL BANKS  

Abstract

This research work is on credit management and incidence of bad debts in Nigeria commercial ba...

Read more
COMMUNICATION: THE KEY IN EFFECTIVE PUBLIC RELATION

EXCERPT FROM THE STUDY

Communication and business success are inseparable. To be able to attain organizational objective...

Read more
JUKUN-TIV RELATIONS FROM 1850 TO 1900: A CASE STUDY OF INTER-GROUP RELATIONS IN WUKARI LOCAL GOVERNMENT AREA OF TARABA STATE

ABSTRACT

Jukun-Tiv relation has increasingly gone through disturbing phases over the years, especially as from the incep...

Read more
THE FACTORS RESPONSIBLE FOR PUPILS LATENESS TO SCHOOL IN PRIMARY SCHOOL

BACKGROUND OF THE STUDY

Lateness to school started long ago, every where in a way that cannot be contro...

Read more
DEVELOPMENT AND CHARACTERISATION OF EPOXY/BORASSUS PALM (Borassus aethiopum Mart.) LEAF STALKFIBRE REINFORCED COMPOSITE

Excerpt from the Study

This work was aimed at developing and characterising epoxy/BPLSF reinforced composite by hand lay...

Read more
THE IMPACT OF CURRICULUM DEVELOPMENT ON TEACHING AND LEARNING OF BASIC SCIENCE IN JUNIOR SECONDARY SCHOOL IN NSUKKA

Background of the study

The term science has to do with nature. It is derived from the Latin word &ldqu...

Read more
THE INCIDENCE OF HIV IN BLOOD DONORS

ABSTRACT

This study of the incidence of HIV in blood donors was carried out at Bishop Shanahan Hospital...

Read more
TEACHING AIDS AND BASIC SCIENCE ACADEMIC ACHIEVEMENT IN PRIMARY SCHOOL

ABSTRACT

This study was carried out to investigate teaching aids and basic science achievement in primary school in Yewa South Local...

Read more
Share this page with your friends




whatsapp