CREDIT MANAGEMENT IN THE BANKING SECTOR AND ECONOMIC GROWTH OF NIGERIA

ABSTRACT: In Nigeria, the banking sector is an important part of the financial system, the banking sector dominate the Nigeria financial system as it accounts for about 90% of the total assets in the system. This study is carried out to examine credit management in the banking industry and economic growth in Nigeria. Statistical Package for Social Science (SPSS) and Chi-square were applied to validate the result spanning across 2000-2013. The study relies on purely secondary data. Lending is one of the major functions of bank though most risky any bank that wants to remain in business must lend. The study finds that bank loan and advances accounts for about 98.2% contribution on economic growth for the period under study. The study concludes that there exists a relationship between loan and advances and economic growth and a negative relationship between interest rate, non performing loan and economic growth. The study recommends that CBN should strengthen the banking sector to ensure improved credit flow, also character and financial statement of the borrower should be assessed properly to reduce non performing loan and CBN should lower its maximum rediscount rate to enable bank fix low interest rate thereby enhancing the growth of the economy.