ISSUES IN BANKING AND OTHERS

This study examined the impact of deposit money banks’ operations on investment in Nigeria. The study specifically assessed the effect of private sector credit, interest rate spread and deposit mobilization on investment in Nigeria. The data for the study were source from the CBN statistical bulletin for the period 1984 to 2016. The exploratory design was combined with the ex-post facto research design; the data collection method was desk survey. The study used the Error Correction Mechanism (ECM) for data analysis. Findings showed that jointly, deposit money banks’ lending have a long-term significant effect on the investment in Nigeria. Also, it was revealed that there is a short run causality running from INTS to investment. Again, deposit money bank deposit mobilization has a positive effect on investment in Nigeria. Lastly, interest rate spread and private sector credit have an inverse effect on investment in Nigeria. The study therefore recommends that Deposit money banks should in addition to granting loans to the industrial sector; monitor the use of such funds to avoid loan diversion and consequently poor industrial sector performance. Also, Banks should employ research staff to conduct researches on modern approaches to effective investments and should use the research findings to train her loan customers on the best investment vehicles as this will go a long way to enhance their investment portfolio. Lastly, the spread between lending and deposit rates should be narrowed to trigger savings and enhance banks’ loan supply.