The effect of government borrowing from banking institutions on the volume of credit granted to the private sector

Abstract

The study aimed at analyzing the direction of the volume of government borrowing from banking institutions as well as analyzing the volume of bank credit provided to private institutions and knowing the effect of government lending in maximizing bank laziness, as private investment in developing countries depends mainly on the availability of bank credit, so the exclusion of bank credit may have Negative effects on private investment and then on economic growth, and the study sample consisted of a set of data obtained for Iraqi banks between 2016 until June 2022, and the study reached a set of conclusions and the existence of a co-integration relationship between the variables of the study, but government borrowing from financial and banking institutions did not It affects the volume of credit granted to the private sector, which means that Iraqi banks did not take their role in directing investment by granting cash credit effectively. The current study recommends working to employ the funds obtained from investments mainly in the private sector through the private sector stock market to achieve sustainable development for those sectors..