IMPACT OF BANK CREDIT ON THE CONTRIBUTION ON SMALL AND MEDIUM SCALE ENTERPRISES

IMPACT OF BANK CREDIT ON THE CONTRIBUTION ON SMALL AND MEDIUM SCALE ENTERPRISES

Project Details

IMPACT OF BANK CREDIT ON THE CONTRIBUTION ON SMALL AND MEDIUM SCALE ENTERPRISES



Contact Chris Research

Description

The objective of the study was to examine the impact of bank credit on industrial growth in Nigeria using annual secondary data from 1970 to 2013. This is imperative because the assessment of the national accounts of Nigeria indicates that the real sector contributes over 60.0 per cent to the gross domestic product (GDP), but attracts only about 40.0 per cent of total credit. Banks were reluctant to lend for real sector activities for reasons such as poor managerial ability, ability to repay, unfavourable growth prospects in the sub-sector, inherent risk and insufficient collateral In an attempt to achieve the broad objective of this study, the Ordinary Least Square OLS multiple regression analysis was adopted for the estimation of the regression model formulated and the result of the model was facilitated using the Econometric View (E-View). The data for the analysis of the model were collected from secondary sources to include the Central Bank of Nigeria (CBN) Statistical Bulletin and National Bureau of Statistics. In the model, Bank credit to industrial sector INDBC, interest rate INTR and inflation rate INFL were the explanatory variables, while industrial output INDGDP as proxy by industrial sector GDP was the dependent variable. The result of the analysis at 5% level of significance shows clearly that bank credit has a significant positive impact on Industrial Gross Domestic Products in Nigeria. While the impact of interest rate and inflation rate on industrial output as proxy by industrial Gross Domestic Products in Nigeria was positive but insignificant. The recommended among others the need for government to pursue financial sector development to promote savings and bank credit. When the size of saving is increased, enough bank loans will be available for both the private and public sector which will enhance economic growth.
TABLE OF CONTENTS
CHAPTER ONE – INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Scope of the Study
1.7 Justification of the Study
1.8 Operational Definition of Terms
CHAPTER TWO – LITERATURE REVIEW
2.1 Conceptual Framework
2.1.1 Concept of Banking
2.1.2 The Concept of Bank Credit
2.1.3 Credit Creation Assumption
2.1.4 Small and Medium Scale Enterprises
2.2 Theoretical Literature
2.2.1 Financial Interest Rate Theories
2.2.2 Financial Development and Economic Growth Theories
a) McKinnon-Shaw financial repression paradigm
b) Supply – Leading Hypothesis
c) Demand – Following Hypothesis
2.3 Empirical Literature.
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Research Design
3.2 Study Area
3.3 Population of the Study
3.4 Sample Size and Sampling method
3.5 Data Type and Instrument for Collecting data
3.6 Validity and reliability of research Instrument
3.7 Model Specification
3.8 Method of Data Analysis
CHAPTER FOUR – PRESENTATION AND ANALYSIS OF DATA
4.1 Data Presentation
4.2 Interpretation of Results
4.3 Implication of findings
CHAPTER FIVE – SUMMARY, CONCLUSION, AND RECOMMENDATIONS
5.1 Summary
5.2 Conclusion
5.3 Recommendations
REFRENCES
APPENDIX

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