ROLE OF COMMERCIAL BANK IN NIGERIA

ABSTRACT - In industrial sector growth, commercial bank credits play a significant role by creating long term load to the investor’s and advising management in the formulation and implementation of good relationship between financial sector and industrial strategies. Our hypothesis is that there is no significant relationship between commercial banks credit and industrial growth in Nigeria. After determining the nature of function relationship between the above, using the (Ordinary Least Square (OLS) method, unit root test, co-integration test and error correction method) it was found that commercial bank credit to industrial sector and other variable use in the study were significant. 

We observed that R2 was very high ranked (88%) of total variation of industrial sector growth which was explained by the commercial bank credit. That the t–statistic suggested rejection of the Null hypothesis, which will implies that commercial bank credit, statistically/empirically proof significant to Nigerian industrial growth during the period under review. Hence the researcher recommends the following: (1) Commercial bank credit provision ratio should be diversified to productive investment sector that will enable the investors to invest and return its principal; this will keep long-run relationship between investors and the bank in Nigerian economy. (2) Government should encourage private sector participation in some industries innovation to create competitive character in the economy. (3) Security should be the hallmark of the government, banks and investor if growth and development should be the goal of Nigerian industrial sector.
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