MONETARY POLICY, FINANCIAL INTERMEDIATION AND HOUSEHOLD DEBT IN NIGERIA

Résumé

The study examined the effect of monetary policy on financial intermediation and household debt in Nigeria from 1986 to 2018. The Vector Auto regression (VAR) estimation technique was used for the data analysis. Time series data for the analysis were sourced from the 2018 CBN statistical bulletin. The findings of the study revealed that monetary policy rate has a negative effect on financial intermediation in Nigeria. It also revealed that monetary policy rate have negative effect on household debt in Nigeria. From the findings, it was revealed that the MPR as a monetary policy instrument is not effective in stimulating the activities of financial intermediaries in channelling funds and credits among lenders and borrowers, most especially the households in Nigeria. As a result, the study recommended among others that, the Central Bank of Nigeria should ensure a downward review of the monetary policy rate as well as device measures to ensure that monetary policy is implemented with a view to maintaining a stable interest rate.