Appraisal Of Deposit Money Banks Investment And Lending Operations In Nigeria (1995-2007)

ABSTRACT

 In this study, investigations were made on how Deposit Money Bank Investment and Lending Operation between 1995 to 2007 in emerging Financial Market in Nigeria influence firm's investment behaviour, the key determinant of firm's productivity. The empirical results shows that firms lending are less sensitive to those firm's profitability and tangibility. Secondly, political connection is a violated factor in Deposit Money Bank investment and lending operations. Consequently, this study finds out that low growth firms invest less efficiently than high growth firm. Moreover, the negative relation between firm's investment efficiency and Deposit Money Bank Lending is stronger for State Owned Enterprises and low growth firm. In summary, soft lending by deposit money bank, destroy economic growth because of misallocation of loans among firms and also because of inadequate operation to monitor firms' project selection.