FACTORS AFFECTING PRIVATE SECTOR CREDIT AND ITS CONSEQUENCES ON JOB CREATION

Abstract

This study examined the factors affecting private sector credit and its implications for job creation in Nigeria for the period of 1981-2021. The study used Auto-Regressive Distributed Lag (ARDL) to examine the relationship between the dependent and independent variables. The study found that gross domestic product (GDP) growth rate is negatively and insignificantly related to private sector credit in Nigeria in the long run. Also, Exchange rate is positively and insignificantly related to private sector credit in Nigeria in the long run. Interest rate is positively and significantly related to private sector credit in Nigeria in the long run. Domestic debt (DMD) from the analysis is negatively and significantly related to private sector credit in Nigeria in the long run. Also, Gross Domestic Savings (GDSAV) from the analysis is negatively and insignificantly related to private sector credit in Nigeria in the long run. Finally for the long run, GDP from the analysis is positively and significantly related to private sector credit in Nigeria. In the short run, private sector credit in the previous year is found to be positively and significantly related to private sector credit. Also, private sector credit in its two year lagged form is negatively and significantly related to private sector credit. Also, Gross domestic product growth rate in the period under consideration from the analysis is negatively and significantly related to private sector credit in Nigeria during the period under consideration. Also, Gross domestic product growth rate in the previous year from the analysis is negatively and significantly related to private sector credit in Nigeria during the period under consideration. Also, the two year lag of Gross domestic product growth rate from the analysis is negatively related to private sector credit and significantly in Nigeria during the period under consideration. Also, Exchange rate from the analysis is positively and insignificantly related to private sector credit in Nigeria during the period under consideration. Interest rate in the current period from the analysis is positively and significantly related to private sector credit in Nigeria during the period under consideration.