EFFECTIVENESS OF CREDIT GUIDELINES ASAN INSTRUMENT OF MONETARY POLICY IN NIGERIA.

INTRODUCTION
1.1BACKGROUND OF THE STUDY One important factor affecting the level of economic activities in any economy is change in supply.  These changed affects directly the rate of spending by the citizen of the country.  It is therefore, because of the economic importance of monetary that the monetary authorities has devoted time and resources towards money management with a view of reaping the benefits inherent therein. The credit guideline, which is my topic of study, has formed the apex instrument used by monetary authorities in Nigeria to influence economic activities.  The guidelines are informed of central bank of Nigeria monetary policy circulars prescribing sectoral and aggregate increase and decreasing in credits by the commercial and merchant banks. According to Anyanwu J.A. (1998) the credit guidelines can be used to regulate the pace and content of economic in an economy.  This involves authorities interference with the volume and direction of credit by the commercial and merchant banks to those sectors of the economy.  This is why the government divided the economy into major sectors, the preferred or high priority sector and the less preferred or high priority sector and the less preferred or “others” sector. The preferred sector comprises of agricultural industrial or manufacturing enterprises residential building construction, exports and essentials services sub-sectors. The government has since the introduction of the credit guidelines in 1964, being urging banks to grant more credit facilities to this sector or order to boost the rate of economic development in the country.  The less preferred sector of the economy also comprises of general commerce, government and “others”.  Government also urges the banks to allocate less funds or exercise restraint in granting loans and advances to this sectors because of the affects it this sectors because of the affects it would have no the general price level. Credit guidelines could also be regarded as an anti-inflationary techniques preventing the flow of funds to those sectors.  Of the economy that are very sensitive to inflationary pressures. According to Orjih .J. (1996): credit Guidelines is the policy sp0elt out by the central bank of Nigeria CBN, which regulates the credit creation of the commercial banks. This control measure was adopted by the CBN for achieving the objectives of general economic policy.  It changes the volume, quantity, availability cost and direction of money and credit in a given economy.
TABLE OF CONTENTSTITLE PAGEIIAPPROVAL PAGEIIIDEDICATIONIVACKNOWLEDGEMENTVABSTRACTTABLE OF CONTENTSVI
CHAPTER ONE:1.0INTRODUCTION11.1BACKGROUND OF THE STUDY11.2STATEMENT OF THE PROBLEM31.3OBJECTIVE OF THE STUDY41.4SIGNIFICANCE OF THE STUDY61.5LIMITATION OF THE STUDY6REFERENCE8
CHAPTER TWO:2.0REVIEW OF RELATED LITERATURE92.1GENERAL REVIEW92.2OBJECTIVE OF CREDIT POLICY GUIDELINES162.3INSTRUMENTS OF CREDIT GUIDELINES 192.4CREDIT GUIDELINES “HISTORICAL PERSPECTIVES22REFERENCE27CHAPTER THREE3.0RESEARCH DESIGN AND METHODOLOGY293.1SOURCES OF DATA293.2LOCATION OF DATA30
CHAPTER FOUR4.1FINDINGS31
CHAPTER FIVE5.0RECOMMENDATION AND CONCLUSIONS355.1RECOMMENDATION355.2CONCLUSIONS37BIBLIOGRAPHY39