Private Sector Credit and Entrepreneurial Growth in Nigeria (1986 – 2018)


  • Eric Okwuchukwu Nwajiaku
  • Dr. Benson Aisagbonbuomwan Esan
  • Amalachukwu Ananwude Nnamdi Azikiwe University, Awka, Anambra State



Private Sector Credit, Entrepreneurial Growth, Nigeria


Purpose: The role of entrepreneurial activities in the economic development process cannot be underestimated. How entrepreneurial growth in Nigeria has been affected by commercial banks’ credit to the private sector was examined in this study.

Methods: Autoregressive Distributive Lag (ARDL) was the estimation technique applied, while the Granger Causality was for effect assessment using annual data from 1986 to 2018.

Result: The study found that entrepreneurial growth in Nigeria was significantly affected by private sector credit.

Implications: There is a need for banks to cut down their fee on lending to entrepreneurs. Commercial banks charge as high as 22 percent to give loans to the private sector, and this is considered among the highest in the world. This makes it difficult for entrepreneurs to access fund from banks which make them resort to co-operative societies for finance. Equally, the Central Bank of Nigeria should lower the monetary policy rate to a single digit, let say 9 percent as against the current rate of 14 percent. This to a reasonable degree will make banks at least lower their fee/interest rate to lend to entrepreneurs.




How to Cite

Nwajiaku, E. O. ., Esan, D. B. A., & Ananwude, A. (2020). Private Sector Credit and Entrepreneurial Growth in Nigeria (1986 – 2018). Finance & Economics Review, 2(3), 14–24.