Chapter One — 1.1 Background to the Study

Over the past decade, the relationship between credit risk management and economic growth has become a subject of considerable debate among scholars and industry practitioners alike, particularly within the context of Selected States in Nigeria where operating conditions differ markedly from more developed markets.

Within the context of Selected States in Nigeria, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of credit risk management on economic growth, making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

While credit risk management is widely discussed in policy and industry circles, empirical evidence on its actual effect on economic growth within Selected States in Nigeria remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to credit risk management are helping or hindering economic growth — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Credit Risk Management on economic growth in Selected States in Nigeria.
2. To assess the extent to which credit risk management influences economic growth within the study area.
3. To identify the challenges associated with credit risk management in relation to economic growth.
4. To recommend strategies for optimizing credit risk management in order to improve economic growth.

1.4 Research Questions

1. What is the effect of credit risk management on economic growth in Selected States in Nigeria?
2. To what extent does credit risk management influence economic growth within the study area?
3. What challenges are associated with credit risk management in relation to economic growth?
4. What strategies can be adopted to optimize credit risk management in order to improve economic growth?

1.5 Significance of the Study

Beyond its academic contribution to the field of finance / banking, this study has practical value for management teams within Selected States in Nigeria seeking to understand how credit risk management translates into measurable outcomes around economic growth. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

In terms of scope, this study confines itself to Selected States in Nigeria, focusing specifically on how credit risk management relates to economic growth within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.