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Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia

Financial development, especially through the mechanism of private sector credit lines, has an important role to play in an economy’s growth. As such, economies with better financial institutions for lending and borrowing funds have the potential to grow faster. This is so because better financial s...

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Main Author: Hakwaashika, Rauna N.
Other Authors: Alhassan, Abdul Latif
Format: Thesis
Language:Eng
Published: Graduate School of Business (GSB) 2019
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access_status_str Open Access
author Hakwaashika, Rauna N.
author2 Alhassan, Abdul Latif
author_browse Alhassan, Abdul Latif
Hakwaashika, Rauna N.
author_facet Alhassan, Abdul Latif
Hakwaashika, Rauna N.
author_sort Hakwaashika, Rauna N.
collection Thesis
description Financial development, especially through the mechanism of private sector credit lines, has an important role to play in an economy’s growth. As such, economies with better financial institutions for lending and borrowing funds have the potential to grow faster. This is so because better financial systems alleviate external financing constraints that may hinder business growth and expansion. In light of this, the study investigated the relationship between private sector credit extension and economic growth in Namibia. Using quarterly data on Gross Domestic Product (GDP) and other variables covering the years from 2005 to 2017. The study employed co-integration and error correction procedures. From the results the study concluded that there is an existence of a positive relationship between private sector credit extension (PSCE) and economic growth. Our findings are consistent with theoretical propositions. The causality test indicated a unidirectional relationship running from PSCE to GDP entailing that the extension of credit to the private sector would enhance GDP growth and not vice versa. Based on these findings, it is recommended that the policy makers focus on long term economic growth policies, develop the financial sector, promote the development of efficient financial markets and infrastructure in order to increase the private sector credit lines which are instrumental in long term growth.
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institution University of Cape Town (South Africa)
language Eng
last_indexed 2026-06-10T12:32:41.376Z
license_str Not specified — see source repository
provenance_str_mv Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository
publishDate 2019
publishDateRange 2019
publishDateSort 2019
publisher Graduate School of Business (GSB)
publisherStr Graduate School of Business (GSB)
record_format dspace
source_str UCTD — University of Cape Town Open Access Repository
spelling oai:open.uct.ac.za:11427/30369 Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia Hakwaashika, Rauna N. Alhassan, Abdul Latif Financial development, especially through the mechanism of private sector credit lines, has an important role to play in an economy’s growth. As such, economies with better financial institutions for lending and borrowing funds have the potential to grow faster. This is so because better financial systems alleviate external financing constraints that may hinder business growth and expansion. In light of this, the study investigated the relationship between private sector credit extension and economic growth in Namibia. Using quarterly data on Gross Domestic Product (GDP) and other variables covering the years from 2005 to 2017. The study employed co-integration and error correction procedures. From the results the study concluded that there is an existence of a positive relationship between private sector credit extension (PSCE) and economic growth. Our findings are consistent with theoretical propositions. The causality test indicated a unidirectional relationship running from PSCE to GDP entailing that the extension of credit to the private sector would enhance GDP growth and not vice versa. Based on these findings, it is recommended that the policy makers focus on long term economic growth policies, develop the financial sector, promote the development of efficient financial markets and infrastructure in order to increase the private sector credit lines which are instrumental in long term growth. 2019-08-01T07:38:59Z 2019-08-01T07:38:59Z 2019 2019-07-31T10:37:46Z Master Thesis Masters MBA http://hdl.handle.net/11427/30369 Eng application/pdf Graduate School of Business (GSB) Faculty of Commerce
spellingShingle Hakwaashika, Rauna N.
Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia
thesis_degree_str Master's
title Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia
title_full Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia
title_fullStr Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia
title_full_unstemmed Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia
title_short Investigating the relationship between private sector credit extension and economic growth: A case study of Namibia
title_sort investigating the relationship between private sector credit extension and economic growth a case study of namibia
url http://hdl.handle.net/11427/30369
work_keys_str_mv AT hakwaashikaraunan investigatingtherelationshipbetweenprivatesectorcreditextensionandeconomicgrowthacasestudyofnamibia

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