Credit Rationing In The Nigeria's Commercial Loan Market

Overview
Cite Work

ABSTRACT

In this thesis, the concern has been to examine the structure, function and effects of Nigeria's commercial loan market. The main focus has been to empirically test for the incidence of credit rationing in the loan market, explain the rationale, identify the form and magnitude of rationing and examine the effects in the Nigerian economy. With respect to the structure and functions of the loan market, concentration ratio and market share indices were defined and derived as key measures of structure while loan maturity pattern and credit policy compliance are used to measure performance. Examining the reasons for high concentration in the market, the study finds that the two most significant factors with positive impact are capital intensity of banking operation and the rate of growth of the four dominant banks. The most significant factor which explains rivalry (absence of stability in market shares) among the dominant banks is growth in the demand for the services of the banking industry. Market share, the study finds, tends to stabilize as bariks grow bigger. These measures present a clearer picture of the structure and the conduct of the market. Thus, by examining the conduct of the loan market, the study incorporates elements of structure-conduct-performance analysis.

Subscribe to access this work and thousands more

Subscribe & Access

Credit Rationing In The Nigeria's Commercial Loan Market

Related Works