EFFECT OF SELECTED MACROECONOMIC VARIABLES ON BANK CREDITS PERFORMANCE IN NIGERIA

The financial sector plays key roles in economic growth by means of financial intermediation and service provisions. Fluctuations of macroeconomic variable scan possibly bring about defaulter in payments of financial obligations. Consequently, the instability in these economy activities alter bank credits uncertainty of financial institution in both short run and long run. Through the Regression model, the study examined the effect of selected macroeconomic variables on bank credits for the period of 2006 to 2017. The independent variables which is macroeconomics variables are proxied by exchange rate, interest rate, inflation rate and gross domestic product while the dependent variable which is bank credits was proxied by non-performing loans. Expost-facto research design was used in the study with 15 quoted deposit money banks in Nigeria as the sample size of the study. Secondary data was used to analyze the extracted panel data with the use of EVIEWS 10 statistical package. It was found that macroeconomic variables have significant relationship with bank credits. It was concluded based on the analysis that exchange rate has a significant relationship on bank credits while inflation rate has no significant relationship in the short run but will be significant in the long run. Based on the findings, it was recommended that government should monitor macroeconomic variables, particularly exchange rate interest rate and inflation, to create an enabling environment for bank credits to grow steadily and viably for investment and economic expansion in Nigeria.