THE IMPACT OF DOMESTIC CREDIT ON ECONOMIC GROWTH IN NIGERIA
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Attaining high level of economic growth had been a major policy objective of the Nigerian government over
the years. In order to achieve this, the nation had targeted domestic credit mobilization and utilization to
minimize the problem of capital flight and other related volatile economic situations. Based on System
Generalized Method of Moments (SYSGMM) with sectors as the study units, it was found that domestic
credit and female employees had negative impact on economic growth and was statistically significant at 10
percent. The negative impact could be due to high interest rate on loans, skills mismatch, weak institutions,
fewer full-time female employees, low level of education among women compared to men and high number
of women in the informal sector. The Federal Government should mobilize unclaimed dividends and idle
funds in banks for use at less than 10 percent interest rate by producers as loans. This will make more funds
available for use as domestic credit and improve its contribution to economic growth.
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