ABSTRACT

The study empirically examined the impact of bank lending rate on the economic growth in Nigeria, using time series data on the variables understudy from 1995 to 2020. The ordinary least square regression method was used to analyze the data. The results from the empirical analysis revealed that lending interest rate exert a statistically significant negative impact on RGDP at 5% percent significance level, loans and advances had a statistically insignificant positive relationship with RGDP at 5 percent significance level, money supply impact positively and insignificantly (at 5% significance level) on GDP, exchange rate impact positively and significantly (at 5% significance level) on GDP and inflation rate impact positively and insignificantly (at 5% significance level) on GDP.The study recommends among others that, deposit money banks should ensure that optimum lending interest rate is maintained at all times; the policy makers should create a pleasant and favourable regulatory environment for banks to thrive as such actions would enhance banks’ efficiency towards the performance of their financial intermediary role thereby enhancing the growth of the economy; deliberate efforts should be taken by the government and policy makers to ensure a favourable exchange rate as such would increase the revenue generated in form of exports and reduce the money spent in form exports thereby maintaining an optimum circulation of money which would enhance the growth of economic activities and the economy as whole; and inflation rate should be left at its minimum by creating a balance between the demand and supply end thereby ensuring that the issue of excess demand which is a major cause of inflation is minimized, thus, maintaining a stable and growing economy.