Paper Title
Nexus Between Credit Procyclicality and The Real Economy of Nigeria

Abstract
The crucial role that the banks play in an economy cannot be stressed more than the consequences of an unstable financial sector. This was evident in the financial crisis of 2007/2008. Developing countries are said to have been affected by the global financial crisis in recent times and this calls for empirical studies on the relationship between credit procyclicality and the real economy in Nigeria. Data were extracted from both World Development Indicators and Nigeria Deposit Insurance (NDIC) for the period 1999-2017. The nature of the variables involved prompted the use of a dynamic model to establish the relationship between the variables. To achieve this objective, an Autoregressive Distributed Lag (ARDL) approach was used and the bounds test results confirmed the existence of a long-run relationship between the variables. In the short run, domestic credit to private sector, and total deposit are not significantly related to real GDP, but exchange rate, lending rate and trade openness are significant. The long-run results revealed that lending rate, trade openness and exchange rate affects the economy negatively while total deposit is a means to improve the economy. This suggests that the government should improve liquidity to stimulate the economy. Also, lending rate and exchange rate should be regulated because they harm the smooth operation of the economy. Keywords - ARDL, Exchange rate, Lending rate and real GDP