IMPACT OF BANK CREDIT ON THE PERFORMANCE OF MANUFACTURING SECTOR IN NIGERIA

The study investigates the effect of bank credit on the performance of the manufacturing sector in Nigeria. It specifically sought to find out how the total domestic credit of deposit money banks affects the performance of the manufacturing sector in Nigeria. Time series data were collected from secondary source covering a period of 20 years (1990-2010). Ordinary least square econometric technique, ADF lest and Granger causality test were employed in testing the hypotheses. The findings of the study show that credit to manufacturing sector have significant relationship with capacity utilization (56%) and index of manufacturing production (69%). However, the relationship is not strong. These results, therefore, call for intense effort by the government, manufacturers and the lending institutions to evaluating the bank credit and provide appropriate macro- economic conducive environment, so as to encourage efficient and effective intermediation process of lending and borrowing by the financial institutions to achieve high investment in the manufacturing sector.