BANK CREDIT AND MANUFACTURING FIRMS PERFORMANCE IN NIGERIA
ABSTRACT
This study sought to examine the impart of bank credit on manufacturing firms performance in Nigeria. To facilitate this study, various hypothesis were proposed on the relationship that seem to exist between bank credit and manufacturing firms performance in Nigeria. Using data covering the period of 1986 to 2016, the OLS econometric tool was utilized to empirically examine the relationship.
OLS was employed to empirically examine the relationship between five variables, such as commercial bank credits, capital stock, labour, manufacturing capacity utilization and exchange rate.
It is recommended by findings of this research that increased credit channelling from the banking sector to the manufacturing sector should be encouraged through sectoral policies that will enhance the growth and performance of the manufacturing sector in Nigeria.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1    Background to the Study    -    -    -    -    -    
1.2    Statement of Research Problem    -    -    -    -    
1.3    Objectives of the Study    -    -    -    -    -    
1.4    Hypotheses of the Study    -    -    -    -    -    
1.5    Significance of the Study    -    -    -    -    -    
1.6    Scope of the Study    -    -    -    -    -    -    
1.7    Limitation of the Study    -    -    -    -    -    
CHAPTER TWO: LITERATURE REVIEW
2.1    Introduction    -    -    -    -    -    -    -    
2.3    Theoretical Review    -    -    -    -    -    
2.4    Empirical Review    -    -    -    -    -    -    
CHAPTER THREE: METHODOLOGY
3.1    Introduction    -    -    -    -    -    -    -    
3.2    Research Design    -    -    -    -    -    -    
3.3    Population and Sample    -    -    -    -    -    
3.4    Sources of Data    -    -    -    -    -    -    
3.5    Research Instrument    -    -    -    -    -    
3.6    Model Specification    -    -    -    -    -    
3.7    Operationalization and Definition of Variables    -    
CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1     Introduction     -    -    -    -    -    -    
4.2     Results and Data Analysis    -    -    -    -    
4.3     Test of Hypotheses    -    -    -    -    -    
4.4.    Discussion of Findings    -    -    -    -    -    
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1.    Introduction    -    -    -    -    -    -    -    
5.2    Summary of Findings    -    -    -    -    -    
5.3     Conclusion    -    -    -    -    -    -    -    
5.4     Recommendations    -    -    -    -    -    -    
5.5     Suggestions for Further Research    -    -    -    
BIBLOGRAPHY    -    -    -    -    -    -    -    
APPENDIX I    -    -    -    -    -    -    -    
CHAPTER ONE
INTRODUCTION
1.8    Background to the Study
Manufacturing sector plays a key role in modern economic development. Globally, this sector involves the production of goods and services through combined utilization of raw materials and other factors of production such as capital, land and labour force by means of production process.In developed countries like the U S A, Japan and Germany etc, the manufacturing sector is a leading sector in variety of ways through what it has achieved and contributed to the economy in terms of economic growth and development.  It has resulted in input replacement by increase in productivity, export expansion, increase in employment, increase in per capital income giving rise to uniformity in consumption patterns, creation of foreign exchange earning capacity and it has also generated investment capital at a faster rate than any other sector of the economy (Lewis, 1967). With respect to gross domestic product (GDP), the manufacturing sector contribute towards this aspect of the economy than any other sector and it has overtaken the service sector in different organization for economic co-operation and development (OECD) countries (Anyanwu, 2015).
Recognizing the crucial role manufacturing sector plays in any economy, the Nigerian government through its successive rulers (military or democratic dispensation) have continued to articulate policy measures and programs to achieve industrial growth incentive and adequate finance (Orji, 2012).  The Nigeria manufacturing sector is geared towards achieving, Domestic savings, sustained economic growth and the prosperity of Nigeria at large.
Talking about the aim of the approved vision 2020,study projections that Nigeria will be 20th developed economy of the world by 2020 (Goldman Sachs, 2010). The vision is to be attained through growth and development of the private sector, resulting in reduction in oil sector overconcentration and overdependence because there has been a considerable decline or reduction in the output of the manufacturing sector in Nigeria which is faced with series of setbacks, like fund inaccessibility and exorbitant interest rate of credits extended by banks thus making loan accessibility difficult for manufacturers.
1.9    Statement of Research Problem
Despite several government policies, programs and procedures geared toward boosting the performance of the manufacturing sector which will thus result in economic growth and development, the government have directed banks and other financial institutions to focus on the private sector of the economy and also the government have boosted bank performance through restructuring the banking sector as in the case of Banks consolidation (Soludu, 2004) and the bank reform program (Sanusi, 2009). Such restructuring has solidified the banking industry and thus the credit availability to the manufacturing sector, amid such efforts by the Nigerian government most manufacturing firms have continued to experience lack of infrastructural facilities, inadequate resource management, high bank lending rates (CBN, 2010).
Although the empirical relationship between bank credit and manufacturing sector performance cannot be overemphasized, literatures and research work have been carried out on the relationship between this two variables bank credit and manufacturing firms performance and its found that the relationship is one of mutuality, as bank make profit from credits extended to the manufacturing through interest rates and the manufacturing sector get their capital from such credits extended to them by banks, thus resulting in profit to the manufacturing sector and economic development to the country. Most of these studies base the emphasis of their study on the effect of bank credit on manufacturing firms’ performance, without empirically examining in a wide or broad ground the exact impact bank credit have on manufacturing firms performance as regard accessibility, the timeframe of acquiring such credit and the risk inherent in bank credit. It is this perceived gap in literature that this study seeks to fill, by critically examining the impact of bank credit on manufacturing firms’ performance in Nigeria.
Against this background, this study seeks to answer the following research questions:
(i)    Is there a significant relationship between bank credit and manufacturing firms’ performance in Nigeria?
(ii)    Did bank credit cause a retained difference in the performance of manufacturing firms in Nigeria over the years?
(iii)    Has bank credit and manufacturing firms’ performance significantly affected economic growth?
1.10    Objectives of the Study
The main objectives of this study are to examine the empirical relationship between bank credit and manufacturing firms’ performance in Nigeria. The specific objectives are to:
(i)    Examine whether bank credit have a significant relationship on manufacturing firms’ performance.
(ii)    Investigate if bank credit has actually cause a retained difference in manufacturing firms performance in Nigeria.
(iii)    Examine the impart of bank credit and manufacturing firms’ performance on economic growth over the years.
1.11    Hypotheses of the Study
In line with the statement of research problems and objectives of the study, the following null hypotheses will be tested:
(i)    There is no significant relationship between bank credit and manufacturing firms’ performance in Nigeria.
(ii)    Bank credit has not cause a retained difference in manufacturing firms performance over the years.
(iii)    Economic growth rate is not significantly affected by manufacturing firms’ performance and bank credits.
1.12    Significance of the Study
The significance of this study cannot be overemphasized as it will add more empirical insights to the relationship between bank credit and manufacturing firms’ performance in Nigeria. The study will therefore be of immense importance to governments, banks, manufacturers and academia.
To the government and policy makers, the study will help them in the formulation of appropriate policies that will increase bank credit availability and assessment to the manufacturing sectorfavorably.
To banks, this study will help them in making credit accessibility less robust to the manufacturing sector which will thus result in economic development and boost the performance of the manufacturing sector positively.
To manufacturers, this study will help them in accessing credit and utilizing such fund for the economic development of Nigeria at large.
Finally, this study will be of enormous value to the academia, particularly as it will constitute a strong reference source for researchers who may want to engage in further study of the subject matter.
1.13    Scope of the Study
The study seeks to examine the empirical relationship between bank credit and manufacturing firms’ performance in Nigeria over a period of 30years (1986-2016). As this period covers most reforms in the banking sector to enhance bank performance positively.
1.14    Limitation of the Study
This study is a wide study encompassing the banks in Nigeria both past and present, as such some banks have gone extinct (liquidated) while other new one came up still others merge. As a result, data from such liquidated banks or merged banks are not readily available for examining. Secondly, the study is limited by the extent of the coverage period and methodology to be adopted, as both are functions of the available data