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. i.The effectiveness of monetary and credit policy in credit guidelines in Nigeria economy ii.CBN is autonomous in the real sense of it. iii.Some banks violate some of the guidelines in preference to paying fines. iv.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.    

TABLE OF CONTENTS Title Pageii Approval Pageiii Dedicationiv Acknowledgement v Abstractvi List of Tables viii Table of Contents ix
CHAPTER ONE INTRODUCTION1 1.1Background of Study1 1.2Statement of the Study3 1.3Objectives of the Study4 1.4Significance of the Study5 1.5Statement of Hypothesis 5 1.6Scope and Limitation6 1.7Definition of Terms 7
CHAPTER TWO Review of related literature 12 2.1Literature Review12 2.2Objectives of Credit Guidelines Policy16 2.3Instrument of Credit Guidelines 20 2.4The Credit Guidelines Historical Perspective22 2.5Banking System Credit to the Economy28 2.6Sectoral Allocation of Commercial  Banks Loan and Advances 29 2.7Money Supply in Nigeria31 2.8Price Stability 32 2.9Economic Growth 33 2.10Balance of Payment 35 2.11The Financial Institution, the CBN  and Some of their Operations36 2.12Analysis of the 2000 Credit and  Monetary Policy Instruments42 
CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY47 3.1Source of Data47 3.2Questionnaire Design48 3.3Method of Investigation49 3.4Sampling Population and Sample Size49 3.5Determination of Sample Size49 3.6Method of Questionnaire Distribution 51
CHAPTER FOUR DATA ANALYSIS 4.1Data Presentation and Analysis 52 4.2Testing of Hypothesis 60
CHAPTER FIVE SUMMARY OF FINDINGS,  RECOMMENDATION AND CONCLUSION73 5.1Summary of Findings73 5.2Recommendation78 5.3Conclusion 83 Bibliography 85 Appendix 88