Macroprudential policy and credit risk management in Nigerian banks: An empirical analysis

Ehimare, Ucheoma Austie (2025) Macroprudential policy and credit risk management in Nigerian banks: An empirical analysis. International Journal of Science and Research Archive, 15 (3). pp. 1148-1153. ISSN 2582-8185

The research considers how macroprudential policy has affected how Nigerian banks manage their credit risk, from 2020 to 2024. A quantitative approach is used to look at data from Zenith Bank, First Bank of Nigeria, Access Bank, Guaranty Trust Bank (GTBank) and United Bank for Africa (UBA), together with macroprudential and macroeconomic data from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS). The authors use panel data regression to evaluate if relationships exist between macroprudential tools (CAR, CCB and LDR) and credit risk measures (NPL ratios and LLP). The study found out that CAR and CCB are very effective in lowering credit risk, LDR and requirements for some sectors remain less important. Growth in the economy, changes in inflation rates and wild exchange rates all play a part in influencing credit risk, where more economic growth decreases risk and increasing inflation or big swings in currency values make it greater. According to the study, strong capital buffers guide banks clear of serious risks and call for more strict policy enforcement and economic balance. With so little data to work with, the findings still give useful advice to policymakers and executives to create better macroprudential rules and risk management strategies in Nigeria’s banking sector.