ABSTRACT

The study is an empirical attempt to discern the effect of lending rate fluctuation on bank overall profitability.. The study is predicated on the problem that the quest for bank survival has led to the high lending rate charged on borrowers by the banks in order to make more profits to keep a float thereby strangulating the borrower who also wants to make profit from the borrowed fund. Multiple. regression and the correlation analysis were the statistical tools used to test for the hypothesis. It was found that lending rate fluctuation has no significant effect on bank earnings. Also lending rate fluctuation depicted significant relationship with the gross domestic products. The study •rccommended that banks should avoid lending at a high rate since it may lead t irrecoverable and bad debts. Also government should cicvis p policies that will enshrine macro-economic stability in th economy.

TABLE OF CONTENTS

Title page i

Project Assessment

Declaration iv

Certification v

Dedication vi

Acknowledgement vii

Table of content viii

List of Tables x

Abstract xi

CHAPTER ONE

INTRODUCTION

4 1.1 Background of the Study 1

1.2 Statement of the Problem 2

1.3 Objectives of the Study 3

1.4 Research Questions S

1.5 Research hypothesis 0 4

1.6 Justification for the Study 5

1.7 . Limitation of the Study 5

CHAPTER TWO 0

LITERATURE REVIEW

2.1 Preamble 7

2.2 The Concept of Bank Lending 8

2.1 Causes of Interest Rate Fluctuation 9

2.2 Rationale for Lending Rate 11

2.3 Lending Rate Fluctuation in Nigeria 13

2.4 Empirical Issues 14

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Scope of the Study 16

3.2 Data Collection and Procedures 17

3.3 Data Analysis Procedures 17

3.4 Standard Error Test S 18

3.5 Data Analysis Techniques and 1-Jypothesis Testing 21

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION

4.1 Data Presentation 23

4.2 Data Analysis and Hypothesis Testing 25

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary 29

5.2 Conclusion 30

5.3 Recommendation 30