Determinants of Bank Credit on the Private Sector in Rwanda

It is widely accepted among economists, policy makers and central bankers that the main objective of macroeconomic to achieve a high sustained economic growth rate while maintaining low inflation rate. also generally believed detrimental medium long-run growth. This study thus aims at bridging these gaps in literature by examining empirically determinants credit private sector based on supply demand factors over period 2006Q1-2019Q4 using ARDL model. investigate CPS Autoregressive Distributed Lags model due its several advantages. Both influencing bank single equation longer time period. Finding from autoregressive distributed lag (ARDL) framework reveal long run, banking deposits constitute major CPS. A 1 percent increase will result into 1.3% Government domestic borrowing has been significant with expected sign but coefficient. If GCCB by1%, declined 0.08% run. coefficient may be explained share government total assets (8.4%). The revealed that, Non-performing loans ratio found insignificant run under review. Interest spread changes When IS increases 0.02%. interest basically constrained borrowers, lack financial literacy, information asymmetry, competition which results rigidity lending maintain relatively Rwanda.