EFFECTIVENESS OF CREDIT GUIDELINES AS AN INSTRUMENT OF MONETARY POLICY IN NIGERIA
ABSTRACT: The credit guidelines are those monetary policy instruments used by the monetary authorities particularly the Central Bank to influence the supply, allocation and cost of credit with view to attaining specific macro-economic objectives in the country. It is a deliberate measures aimed at controlling the qualitative supply of money. Some of the goals are directed towards steering and maintaining the economy at its full potential output to attain full employment, to achieve a balance of payment equilibrium and to moderate inflationary pressures. The objectives of the study includes the examination of credit guidelines, to identify factors militating against the realization of the guidelines, to evaluate the Central Bank’s method of compliances, to identify areas of frictions (if any) between the CBN and the government and to make recommendation for the effective improvement of the policy guidelines.  Using the correlation analysts and chi-square distribution, four hypothesis listed below were tested.
- The effectiveness of monetary and credit policy in credit guidelines in Nigeria economy
- CBN is autonomous in the real sense of it.
- Some banks violate some of the guidelines in preference to paying fines.
- CBN encounter problems while ensuring compliances by banks and other financial institutions.
Source of data used included primary and secondary sources. Primary data involved interviews and use of questionnaires while the secondary data were sourced from the CBN library, literature in the field of economics, banking and finance.
Recommendation and conclusion were based on find lasting solution to improve the operation of the credit guidelines in Nigeria.
LIST OF TABLE
- Banking System Credit to the Economy (1993 – 2000)
- Sectoral Allocation of Commercial Banks Loan and Advances (1993 – 2000)
- Money Supply in Nigeria (1993 – 2000)
- Price Stability (1993 – 2000)
- Economic Growth (1993 – 2000)
- Nigeria Balance of Payment Positions (1993 – 2000)
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTIONÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 1
- Background of Study                                                    1
- Statement of the Study                                                 3
- Objectives of the Study                                                 4
- Significance of the Study                                                      5
- Statement of Hypothesis                                                        5
- Scope and Limitation                                                    6
- Definition of Terms                                                      7
CHAPTER TWO
Review of related literature                                                     12
- Literature Review                                                         12
- Objectives of Credit Guidelines Policy                          16
- Instrument of Credit Guidelines                                    20
- The Credit Guidelines Historical Perspective                         22
- Banking System Credit to the Economy                       28
- Sectoral Allocation of Commercial
Banks Loan and Advances                                           29
- Money Supply in Nigeria                                                       31
- Price Stability                                                               32
- Economic Growth                                                                  33
- Balance of Payment                                                      35
- The Financial Institution, the CBN
and Some of their Operations                                       36
- Analysis of the 2000 Credit and
Monetary Policy Instruments                                       42
CHAPTER THREE
RESEARCH DESIGN AND METHODOLOGYÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 47
- Source of Data                                                              47
- Questionnaire Design                                                    48
- Method of Investigation                                                49
- Sampling Population and Sample Size                                   49
- Determination of Sample Size                                      49
- Method of Questionnaire Distribution                                   51
CHAPTER FOUR
DATA ANALYSIS Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
- Data Presentation and Analysis