An Investigation of Interest Rate Sensitivity on Borrowing Behaviour of Individuals, Firms and Businesses in Access Bank Plc

Mohammed Musa Adamu and Abdulaziz Aliyu
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Mohammed Musa Adamu: Bingham University, Karu- Nigeria, Nile University of Nigeria
Abdulaziz Aliyu: Bingham University, Karu- Nigeria, Nile University of Nigeria

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 1, 4843-4850

Abstract: Interest rates play a crucial role in shaping the behaviors of individuals, businesses, and governments within financial markets. The primary focus of this research lies in exploring the impact of interest rate sensitivity on the borrowing patterns of Individuals, firms, and businesses within Access Bank PLC. Notably, the level of interest rate sensitivity regarding borrowing behaviors in retail banks significantly influences their financial stability and profitability. Through the utilization of an ex-post-facto research methodology, this study compiles data from secondary sources to delve into the interest rate sensitivity experienced by Individuals, Firms, and Businesses operating within Access Bank Plc. Insights drawn from a myriad of studies, articles, and reports contribute to this examination. The dataset spanning 13 years of interest rate regimes (2010-2022) was extracted from the Access Bank Annual Financial Reports, enabling a comprehensive assessment of interest rate sensitivity on the borrowing behaviors of individuals, firms, and businesses within Access Bank PLC. Descriptive statistics were employed to discern behavioral trends. Ultimately, the research posits that investment decisions are influenced by factors beyond mere interest rates, with investments occasionally displaying insensitivity to interest rate fluctuations. Noteworthy is the observation that firms and businesses do not necessarily falter in response to rising interest rates, thereby mitigating concerns of crowding out effects. This phenomenon stems from the interplay of money demand with income, interest rates, and price levels. The study advocates for the development of a robust regulatory framework for interest rate deregulation, anchored by the Monetary Policy Rate (MPR) to govern the operations of commercial banks. Furthermore, it underscores the importance of synchronized macroeconomic policy adoption by governmental, private, and other stakeholders.

Date: 2025
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