Cash Reserve Ratio and Credit to Micro-, Small and Medium-Sized Enterprises in Developing Economies. Analysis of Transmission Channels Using Nigerian Data

This study examines the channels of transmission through which cash reserve ratio impacts on credit to micro-, small and medium-sized enterprises (MSMEs). A vector error correction model was used capture objective. Quarterly data ranging from 2001 2017 were also utilized in analysis. The found that indirectly MSMEs liquidity lending interest rate as its transmission. It is worthy note that, has a positive significant impact MSMEs, negative but MSMEs. To boost economic productivity developing economies, therefore recommends monetary authorities reduce order increase commercial banks’ liquidity. As rises, they should their access by Again, government appropriate monitor judicious disbursement interest-free loans/credit banks, especially development banks.