Domestic Credit to the Private Sector and Economic Growth in Cameroon
Keywords:
Bank Capital, Domestic Credit, Economic Growth, Inflation, GDPAbstract
The indispensability of a strong private sector to economic growth and development has been proven severally in empirical research. Nevertheless, different finance theories have assigned varied degrees of importance to private sector performance measures like credit provision and capital accumulation among on economic growth and development. This paper examines the relationship between domestic credit to the private sector by commercial banks, and economic growth in Cameroon, using data extracted from the World Development Indicators over the period 1961 – 2019 inclusive. Three time series models are used in the empirical analysis. Findings from our empirical analysis indicate that the high GDP will positively influence domestic credit to private sector by commercial banks and economic growth in Cameroon. Inflation and Capital have an insignificant negative impact on domestic credit to private sector by commercial banks and economic growth in Cameroon. This work therefore recommends guided increase of credit to private sector in Cameroon by Commercial banks like an instrument for growth and development in Cameroon in particular and the CEMAC zone in general.
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