Impact of Bank Credit on Nigeria’s Manufacturing Sector

  • Oparah, Promise Chika Department of Marketing, Nnamdi Azikiwe University, Awka, Nigeria
  • Ugochukwu Marius Ndubuisi Department of Business Administration, Federal University of Kashere, Nigeria
  • Okoye, Nonso John Department of Banking and Finance, Nnamdi Azikiwe University (NAU), Awka, Nigeria
Keywords: Manufacturing Sector, Bank credits, Bank demand deposit, Bank lending rate, Interest rate Exchange rate, Workers incentives, Employment generation

Abstract

This study examines the Impact of Bank Credit on Nigeria’s Manufacturing Sector. The study was carried out using regression technique of the Ordinary Least Square. The OLS techniques was applied after determining stationarity of our variables using the ADF Statistic, as well as the cointegration of variables using the Johansen approach and discovered that the variables are stationary and have a long term relationship among the variables in the model. From the result of the OLS, it is observed bank credits to manufacturing subsectors, Bank demand deposit, bank lending rate, exchange rate, workers incentives and employment generation have a positive impact on manufacturing subsectors in Nigeria, although, exchange rate was expected to be either positive or negative. From the regression analysis, the result show that bank credits to manufacturing subsectors, Bank demand deposit, bank lending rate, bank interest rate, exchange rate, workers incentives and employment generation are statistically significant in explaining inflation in Nigeria Based on the finding from the study, the researcher makes the following recommendations: The government should adequately finance the manufacturing subsector through Loans and advances to help businesspersons finance, expand and produce new goods thereby increasing rate of employment and enhancing economic growth. The government should ensure that depositors fund is safe in the banks so that banks can mobilize resources through demand deposit and channel same to the manufacturing subsector to enhance production and distribution f goods and services. The government should ensure that bank reduce their lending rate. This will ensure increase in investment and consequently enhancing economic growth.

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Published
2023-02-28
How to Cite
Oparah, Promise Chika, Ugochukwu Marius Ndubuisi, & Okoye, Nonso John. (2023). Impact of Bank Credit on Nigeria’s Manufacturing Sector. Central Asian Journal of Innovations on Tourism Management and Finance, 4(2), 160-173. Retrieved from https://cajitmf.centralasianstudies.org/index.php/CAJITMF/article/view/433
Issue
Vol 4 No 2 (2023): February 2023
Section
Articles

Copyright (c) 2023 Opara, Promise H. , Ugochukwu Marius Ndubuisi , Okoye, Nonso John

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