The Anatomy of Banking System Credit and SMEs Growth in Nigeria: A Cointegration and Causality Analysis
Iwedi Marshal

Abstract
The study is an attempt to examine the anatomy of the banking system credit and SMEs growth in Nigeria from 1980-2014 using the econometric tool of the Johansen and Juselius co-integration test and the Engle granger causality test. The co integration approach was applied after determining stationarity of the variables using the ADF statistic, as well as the causality test using the Engle and Granger approach. From the result it was reveal that long run equilibrium exist among the variables studied in the model. This implies that banking system credit to SMEs will bring about more growth in this sector. However, the study concludes that banking system credit to SMEs will accelerate the SMEs growth in particular and the growth of the Nigeria economy in general, knowing full well, that SMEs with its potential can absorb the increasing level of unemployment experienced in the country and has the capability of turning a greater number of Nigerians from their poor state if the sector is accorded it rightful place. Based on this, the study recommends that a well deserved attention be placed by the government and other stakeholders in the sector in the areas of access to funds, legislations, institutional restructuring and protection.

Full Text: PDF