SECTORAL LOANS DEMAND AND PERFORMANCES OF DEPOSIT MONEY BANKS IN NIGERIA

Abstract

The study empirically examined sectoral loans demand and performances of deposit money banks. Data used for the study was extracted from CBN statistical bulletin and audited annual reports of Banks; the study also employed vigorous econometric methods such as: unit root stationary test, johannse co-integration, multiple OLS regression analysis, granger causality test, impulse response analysis and variance decomposition test. The result revealed that loans and advances to agriculture, mining and quarrying sectors have negatively contributed to the performances of banks while manufacturing and real estate construction sectors contributed positively to the performances of deposit money banks. It is therefore recommended that banks should increase their loans to the less preferred sectors (agriculture, mining and quarrying sectors) on the ground that government will fully guarantee such loans as these sectors will have improved performances consequently leading to increase performances of deposit money banks in the future and the overall growth of the economy.