An Empirical Analysis of the Impact of Bank Money Deposits on the Manufacturing Sector in Nigeria (1980-2012)
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the study are;
- To find out if inadequate credits from the deposit money banks to the manufacturing sector has contributed to the reduction in the productivity of the manufacturing sector.
- To determine how the unwillingness of the deposit money bank to give loans to the manufacturing sector has affected.
- Also to look into the problems that militates against the manufacturing sector apart from finance in Nigeria and the recommendation where necessary.\
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Theoretical Literature
Bank credit is one of the policy option for financing the manufacturing sector. Bank credit which is the sum of loan and securities as deposit money banks, is widely viewed as providing information about the current and future state of the economy. Chizea, (2006). The pattern of enterprise financial differs from country to country. There is a pronounced difference in prevalent corporate financial between mature and emerging firms with a certain economy finance themselves based on a firms with a certain economy finance themselves based on a firms stage in its life cycle. Singh (1995) observed that developing countries firms finance themselves differently, mainly due to different financial environment. He examined financial patterns of 100 top cooperatives in ten developing countries in the eighties according to him, the basic differences are; Firstly, there is an inverse “pecking order” in emerging economics; corporation rely more heavily on external financial, especially trade credits, stock issues and short term debt than their counterpart in developed economies. Secondly, top corporations in developing countries rely more heavily on equity issues than their counterpart in developed economies. Thirdly, most emerging market formation and development by pursing role in stock market formation and development by pursing aggressive proequity financing polices and placing limitations on debt financing of firms, especially from abroad. He state further that why developing countries have different cooperate financing patterns than developed economies is because of the fact that there are many factors determining the enterprise capital structure and firm specific. It seems to him that the overriding factor why there is such a great difference in how emerging market firms and mature market, firms finance themselves is because the countries financial environments are at difference phase of economic life cycle.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain an empirical analysis of the impact of bank money deposits on the manufacturing sector in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of bank money deposits on the manufacturing sector in Nigeria
Summary
This study was on an empirical analysis of the impact of bank money deposits on the manufacturing sector in Nigeria. Three objectives were raised which included; To find out if inadequate credits from the deposit money banks to the manufacturing sector has contributed to the reduction in the productivity of the manufacturing sector, to determine how the unwillingness of the deposit money bank to give loans to the manufacturing sector has affected and also to look into the problems that militates against the manufacturing sector apart from finance in Nigeria and the recommendation where necessary. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from selected CBN staffs in Uyo. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Based on the revelation in this study, will conclude that interest rate has significant impact on the manufacturing sector in Nigeria .Further more federal government expenditure has a negative impact though significant. To achieve this manufacturing sector growth that is desired. The governments have to strive to regulate the interest rate through total liberalization or deregulation of interest in Nigeria. With decreased rate of interest, more loans would be issued out for manufacturing sector.
Recommendation
- Financial and banking issues, should initate conductive monetary and fiscal policies to boost the well being of the manufacturing sector.
- A significant reduction in interest rate will at a stroke, bring relief to the manufacturing sector which will stimulate investment activity.
- There should be moderation of sectoral credit limits, so that deposit money bank can give loan based on the rationality and viability of industrial project
- Deposit money banks needs to be strengthened to enable the sector play its role of financial intermediary
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