Denis is a first Class Graduate of Kaduna State University; an Associate Member of the Institute of Chartered Accountant of Nigeria (ACA), A graduate member of Nigeria Institute of Management (NIM), Member of the Chartered Institute of Bankers of Nigeria (MCIB) and an MBA Student in Ahmadu Bello University, Zaria. Currently working in Banex Group Limited as the General Manager and the Secretary of Banex Microfinance Bank Limited. Supervisors: Dr. Abdulrahim Yusuf Otori Phone: 08063165199 Address: 27 Samuel Crescent, Off Arab Road, FCT Abuja.
DMBs are the major conduit for the monetary authority monetary policy transmission in Nigeria and... more DMBs are the major conduit for the monetary authority monetary policy transmission in Nigeria and the effectiveness of the monetary policy in the economy is contingent on their performance. Consequently, the study was carried out to determine the impact of monetary policy on the performance of DMBs in Nigeria. Annual data of the 17 DMBs in Nigeria was used for the period of 2013 to 2019. A causal research design was adopted with a census sampling technique. Monetary Policy Rate (MPR), Exchange Rate (EXR), Money Supply (M2), Cash Reserve Ratio were used as proxies for monetary policy (the explanatory variables) while Return on Equity (ROE) was used as a proxy for DMBs performance (the explained variable), and bank size (M) was used as a moderating variable to determine the moderating impact on the relationship between monetary policy and performance of DMBs in Nigeria. Diagnostic tests conducted include the Shapiro Wilk normality test, the Harris-Tzavalis Unit Root test, Pearson Product Moment Correlation test, Breusch-Pagan and Hausman tests for the determination of the appropriate model. The study made used of panel regression model and the random effect model was adopted based on the Hausman test conducted. The findings of the analysis revealed that MPR, EXR and CRR have negative impacts on the performance of DMBs in Nigeria however, only EXR is not significant at the 5% level of significance while M2 has a significant positive impact on performance. The moderating variable of bank size also showed a weak significant positive impact on the performance at 10% level of significance with the effect of moderating the magnitude of all the monetary policy instruments. Also, significant positive interactions were discovered between MPR and bank size as well as M2 and bank size. It was therefore recommended that the monetary authority should tread with caution in manipulating the monetary instruments to achieve certain macroeconomic objectives so as not to impact heavily on DMBs performance while DMBs management were advised to be conscious of the monetary policy and strategize ways to improve in their performance, amidst adverse policy prescriptions, which is only possible with a competent management team.
DMBs are the major conduit for the monetary authority monetary policy transmission in Nigeria and... more DMBs are the major conduit for the monetary authority monetary policy transmission in Nigeria and the effectiveness of the monetary policy in the economy is contingent on their performance. Consequently, the study was carried out to determine the impact of monetary policy on the performance of DMBs in Nigeria. Annual data of the 17 DMBs in Nigeria was used for the period of 2013 to 2019. A causal research design was adopted with a census sampling technique. Monetary Policy Rate (MPR), Exchange Rate (EXR), Money Supply (M2), Cash Reserve Ratio were used as proxies for monetary policy (the explanatory variables) while Return on Equity (ROE) was used as a proxy for DMBs performance (the explained variable), and bank size (M) was used as a moderating variable to determine the moderating impact on the relationship between monetary policy and performance of DMBs in Nigeria. Diagnostic tests conducted include the Shapiro Wilk normality test, the Harris-Tzavalis Unit Root test, Pearson Product Moment Correlation test, Breusch-Pagan and Hausman tests for the determination of the appropriate model. The study made used of panel regression model and the random effect model was adopted based on the Hausman test conducted. The findings of the analysis revealed that MPR, EXR and CRR have negative impacts on the performance of DMBs in Nigeria however, only EXR is not significant at the 5% level of significance while M2 has a significant positive impact on performance. The moderating variable of bank size also showed a weak significant positive impact on the performance at 10% level of significance with the effect of moderating the magnitude of all the monetary policy instruments. Also, significant positive interactions were discovered between MPR and bank size as well as M2 and bank size. It was therefore recommended that the monetary authority should tread with caution in manipulating the monetary instruments to achieve certain macroeconomic objectives so as not to impact heavily on DMBs performance while DMBs management were advised to be conscious of the monetary policy and strategize ways to improve in their performance, amidst adverse policy prescriptions, which is only possible with a competent management team.
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