Real deposit rate and credit supply nexus in ECOWAS

The relationship between real deposit rate and credit supply is interrogated with panel data (1980–2015) from ten Economic Community of West African States (ECOWAS) using dynamic common correlated effects mean group (DCCE-MG) pooled (PMG) estimators. results show that has a linear positive long-run impact on for the full sub-samples Communauté Financière d'Afrique (CFA) non-CFA franc countries, while at country levels, mixed varying signs. Similarly, Dumitrescu–Hurlin non-causality (2012) test shows Granger-causes in long run. Overall, findings support McKinnon (Money capital economic development, 1973) Shaw (Financial deepening hypothesis interest an essential ingredient intermediation role financial system suggests depositors are incentivised to give up present consumption by saving high rates.