SUMMARY OF FINDINGS
The research is conducted employing
econometric approach. The objective of the research are to determine the impact
of commercial bank credits on industrial output in Nigeria and to determine the
magnitude of the relationship in Nigeria, and to make policies that will
improve credit availability to the industrial sector. The method of OLS was
then applied so as to obtain estimates of the parameters measured in
elasticity.
The estimates
RECOMMENDATIONS
Improved
Security: Lack of security and steady power supply have led to the commercial
banks to operate at a very high lost leading to high interest rates. High
interests tend to discourage borrowing by the industrial sector and this
hampers their
expansion. The government at all levels should endeavour to
improve security stance in their locality, provide security personnel with
adequate equipment to enhance their operation in providing security. Again, government
should tackle the problem of power supply head on to reduce the operating cost
of commercial banks. All these if put in place will reduce operating cost to
commercial banks and bring about reduction in interest rate to encourage
industrial to source for fund through bank.
Maintenance
of Credit quote: Commercial banks in Nigeria shy away from lending to the
industrial sector considering the high risk associated with it. Statistics
showed that there are high credit defaults among the firms in the industrial
sector given the harsh operating condition surrounding them. Commercial banks
prefer to divert large sum of their credits to other sectors that promise high
returns at a very short period to lending to the industrial sector. The federal
government through the Central Bank of Nigeria should stipulate a compulsory
credit quota that must be given to the industrial sector under favourable terms
to improve their productivity.
CONCLUSION
This research work which was
necessitated by poor performance of the industrial sector amidst a thriving
commercial banks with excess liquidity in their control. The result showed that
commercial banks credit has positive relation with industrial sector growth
although at a very insignificant rate. This stance can be improved if the
recommendations above are being followed by the government. In the work,
interest rate which should have negative relation with industrial sector growth
finally exhibited a positive relation. This can be attributed to many factors
which include the fact that banks shy away from lending to industrial sector or
they place stringent conditions to be met before they could access credit. The
factors affecting the availability of these credits tot eh industrial sector
are not the rate of interest but other conditions attached to it. However, this
can be improved if the government should look into it in a very careful manner.
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