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Commercial Banks Credit and the Performance of the Manufacturing Sector: A Structural Credit Analysis in Nigeria

Dr. Chituru Wike, Dr. Buloh Abelta Kpekpe & Amadi Jeff Chizuru

Abstract

This study examined the effect of commercial banks credit on the performance of the manufacturing sector. The objective was to investigate the extent to which commercial bank credit affect the performance of the manufacturing sector. The study made use of secondary data sourced from Central bank of Nigeria statistical bulletin and financial statement of commercial banks from 2000-2023. The study had manufacturing Gross Domestic Product as the function of Commercial Banks Overdraft, Term Loans Lease, Short Term Loans and Term Credit Facility. Multiple regressions with the aid of econometric view statistical package were use as data analysis method. R2 cointegration, Durbin Watson, F-statistics were used to examine the extent to which the independent variables impact on the dependent variable. Cointegration and Augmented Dickey Fuller Test were used to determine the long and the short run relationship that exist between the dependent and the independent variables. The study found that 75.4 of changes in contribution of industrial sector gross domestic product of Nigerian were due to joint variation in credits to the different segments of the industrial sector. The F-statistic which determines if the changes in the dependent variable are significant or not shows that the aforementioned magnitude of changes in MGDP was significantly (less than 0.05) explained by credit to the industrial sector: Agriculture, Manufacturing, Mining and Quarrying, and government. The Durbin Watson is 2.086525, which are approximately 2.0 shows the absence of the presence of autocorrelation in the study. The result further revealed that commercial banks credits have positive but no significant effect on the growth of the industrial sector except overdraft facility. The stationarity test revealed that the variables are stationary at levels; the co-integration test indicated no long run relationship that exists among the variables. From the findings,

Keywords

Commercial Banks CreditPerformanceManufacturing SectorStructural Credit

References

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