The term commercial bank is the type of financial institution or
intermediary and the bank that lends money, provide transaction and
saving, accepts deposit on behalf of their customers. The study is being
carried out to investigate impact of commercial banking on
manufacturing sector in Nigeria taken Skye Bank of Nigeria Plc, as a
case of study. it examines the credit facilities rendered by commercial
bank to manufacturing industries, it also highlight the problem
hindering commercial bank on manufacturing sector with
suggested possible solution. Sample survey design has been used for the
research work in order to gain insight into a situation that is not
very clear and that has been seriously investigated. Therefore,
questionnaire as a research instrument for primary data collection and
review of related literature were been used to collect both primary and
secondary data respectively. Finding in this work shows that commercial
bank lending to manufacturing sector has not been encouraging over the
years until 1987, when the CBN started to impose sanction on commercial
banks. This study recommend that capital base of commercial bank should
be increased which will lead to increase rate of performance placed on
manufacturing industries and government should constitute law
enforcement agent to monitor the activities of manufacturing industry to
ensure that money obtained from commercial bank are been used
judiciously. In conclusion, commercial bank is playing a vital role on
manufacturing sector in Nigeria and economy as a whole.
CHAPTER ONE: INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The growth of economy and development of banking have often
appeared inseparable until l7 century, there had existed on modern
banking institution anywhere, and there had on modern developed economy.
Before 1892, Nigeria was evidently underdeveloped economically, even in
1975, however, despite the growth in the number of banks Nigeria is
still developing it is true that the number of bank should not be the
only or even the major aspect of banking development have been taken
account, it would still not be correct to imply mono casual relationship
between the development of commercial bank and the growth of a modern
So many factors determine the level and the rate of
development of an economy .the natural resources endowment, labour
supply and capital Are economy blessed with precious minerals, valuable
agricultural crops and a suitable land water mix, is in a better
position to develop than another economy with out these, other things
being equal. In the same manner a country that does not have adequate
supply of requisite manpower is at advantages. this is why most
countries put a premium on manpower development, the justification for
this phases has been succinctly put by Harbinsan, in-deed if a country
is unable to develop its human resources, it cant build anything also,
where there is modern political system, a sense of national unity or a
prosperous modern economy we need not to add anything also.
Capital is another critical factor required in the process
of development .the term of capital however requires some elucidation.
At times, the term capital is used to refer to man made physical
facilities that aid further production of good and services, machineries
and equipment are such facilities, otherwise called real capital they
are produced to serve he needs of further production and not serve the
needs of immediate consumption such good imply the existence of some
surplus over and above the requirements for consumption purpose.
Financial capital commutes also an ideal of surplus the
saving that that result from society income that have not been spent on
procuring good for consumption go make up the financial capital .
Financial capital is required to procure the real capital it is the
concern for the provision of financial capital market the development of
a capital market a desideration in an economy commercial banks happen
to be a subset of these institution that makes up the capital market
1.2 STATEMENT OF THE PROBLEM
The problems in line with the impact of commercial bank on manufacturing sector are as follows point
1 The need to increase supply capital which was based on the level of guarantee.
2 The bulk of the product of subsistence level and therefore
usually generate small surplus out of which little saving for
investment could be made
3 The inability of small and medium scale industries in obtaining loan as a result of requirement
4 The scale of expansion and the adoption of innovation to increase capital requirement.
1.3 PURPOSE OF THE STUDY
The overall objective is to know the role of commercial
bank in manufacturing sector in Nigeria. However, the specific purposes
are as follows
- To know the effects of modern banking credit facilities on manufacturing industries.
- To assess the roles of government fiscal policy in manufacturing bank over the period 1980-1995.
- To highlight the problems hindering commercial bank of manufacturing and suggest possible solution.
- Commercial bank seeks to develop an empirical model of regulators failure decision process of manufacturing sector
1.4 STATEMENT OF RESEARCH HYPOTHESIS
The research question will identify the area where the phenomenon to be studied.
1. Does commercial bank has any role to play on manufacturing industries?
2. Is manufacturing sector has ability to raise loam from bank?
HO: There is no significant relationship between commercial banking and manufacturing sector.
HI: There is significant relationship between commercial banking and manufacturing sector.
HOi There is no significant relationship between manufacturing sector and ability to raise loan from the bank
HOii There is significant relationship between manufacturing sector and ability to raise loan from the bank.
1.5 SIGNIFICANCE OF THE STUDY
The study will be important to the banking industry and manufacturing
sector for the benefit of the nation economy in the following areas:
1. It will offer recommendation on way of achieving
and enhance productivity in the banking industry by provision of credit
to both small, medium and large scale farmer and industries.
2. it will enable the manufacturing sector to performing well
in there productivity for the benefit of a nation by provision of
technical and necessary advise through the commercial bank.
3. Also. It will be a useful addition to the literature on proper planning in the manufacturing industry.
1.6 SCOPE OF THE STUDY
The study focuses on the role of commercial bank on
manufacturing sector and management, trained staff and senior staff
members of Skye Bank Plc. As respondents. While Skye bank maintain an
interlinked branch network of over two hundred and sixty (260) in all
part of Nigeria which her headquarter at 3 Akin Adesola Street Victoria
Island Lagos, Nigeria.
1.6 LIMITATION OF THE STUDY
Based on the topic of this project is to identify the
impact of commercial bank in manufacturing sector in Nigeria .there are
some factors which has been restricted the researcher to reach to the
grassroots of the project. The following are the limitation confronted
during the project work:
2. Time limitation
3. Inadequate financial research
1.8 DEFINITION OF TERMS
The following are the terms used in this project work:
COMMERCIAL BANK:- Ibitoye T.A and O.A Ajayi (2001)
Is a type of financial institution and intermediary. It is a bank that
lends money and provides transaction, savings, money market account and
that accepts the deposit on behalf of their customer.
LOAN :- Donald P. (2007) An arrangement in which a
lender gives money or property to a borrower and the borrower agrees to
return the property or repay the money usually along with interest at
some future points in time.
FINANCE: Mercy Maranga (2009) Is the study of how
investors allocate their asserts over a time under condition of
certainty and uncertainty.
INTEREST:- Somoye (2010). It is a free paid by a borrower of assets to the owner as a form of compensation for the uses assets.