Title:
THE IMPACT OF COMMERCIAL BANKS ON ECONOMIC GROWTH IN NIGERIA

Authors:
Apere ,T.O and Eniekezimene, A.F

Abstract:
This paper investigates the impact of commercial banks on economic growth in Nigeria over the period of 1981-2014. This study made use of quantitative secondary data obtained from the Central Bank of Nigeria (CBN) statistical bulletin (2014). The empirical perspective of this study employed the phillip-perron Unit Root Test, cointegration test, error correction model (ECM) the parsimonious test and the pairwise granger causality test. The results of the study indicate that commercial bank loan, commercial bank assets and investment significantly and positively affect the growth of Nigeria's economy, while interest earnings is negative and insignificant based on the magnitude and the level of significance of the coefficient and p-value and, there is a long-run relationship between commercial bank loans, assets and economic growth in Nigeria. The implication of this finding is that if loans extended by the commercial banks coupled with their asset base and their activities towards investment if constructively managed with faire interest rates, will generate a robust increase in the growth of Nigerian economy. This study therefore recommends that Banks have to be careful with their pricing decision as regard to lending as banks cannot charge low rates that are too low because the revenue from interest income will not be enough to cover the cost of deposits, general expenditures and loss of revenue from some borrowers that do not pay