CHAPTER ONE: INTRODUCTION

1.1    BACKGROUND OF THE STUDY

          The growth of economy and development of banking have often appeared inseparable until l7 century, there had existed on modern banking institution anywhere, and there had on modern developed economy. Before 1892, Nigeria was evidently underdeveloped economically, even in 1975, however, despite the growth in the number of banks Nigeria is still developing it is true that the number of bank should not be the only or even the major aspect of banking development have been taken account, it would still not be correct to imply mono casual relationship between the development of commercial bank and the growth of a modern economy.

          So many factors determine the level and the rate of development of an economy .the natural resources endowment, labour supply and capital Are economy blessed with precious minerals, valuable agricultural crops and a suitable land water mix, is in a better position to develop than another economy with out these, other things being equal. In the same manner a country that does not have adequate supply of requisite manpower is at advantages. this is why most countries put a premium on manpower development, the justification for this phases has been succinctly put by Harbinsan, in-deed if a country is unable to develop its human resources, it cant build anything also, where there is modern political system, a sense of national unity or a prosperous modern economy we need not to add anything also.

          Capital is another critical factor required in the process of development .the term of capital however requires some elucidation. At times, the term capital is used to refer to man made physical facilities that aid further production of good and services, machineries and equipment are such facilities, otherwise called real capital they are produced to serve he needs of further production and not serve the needs of immediate consumption such good imply the existence of some surplus over and above the requirements for consumption purpose.

          Financial capital commutes also an ideal of surplus the saving that that result from society income that have not been spent on procuring good for consumption go make up the financial capital . Financial capital is required to procure the real capital it is the concern for the provision of financial capital market the development of a capital market a desideration in an economy commercial banks happen to be a subset of these institution that makes up the capital market

1.2    STATEMENT OF THE PROBLEM

          The problems in line with the impact of commercial bank on manufacturing sector are as follows point

1 The need to increase supply capital which was based on the level of       guarantee.

2 The bulk of the product of subsistence level and therefore usually          generate small surplus out of which little saving for investment could be made

3 The inability of small and medium scale industries in obtaining loan as          a result of requirement

4 The scale of expansion and the adoption of innovation to increase          capital requirement.

1.3    PURPOSE OF THE STUDY

          The overall objective is to know the role of commercial bank in manufacturing sector in Nigeria. However, the specific purposes are as follows

1. To know the effects of modern banking credit facilities on manufacturing industries.
2. To assess the roles of government fiscal policy in manufacturing bank over the period 1980-1995.
3. To highlight the problems hindering commercial bank of manufacturing and suggest possible solution.
4.  Commercial bank seeks to develop an empirical model of regulators failure decision process of manufacturing sector

1.4    STATEMENT OF RESEARCH HYPOTHESIS

          The research question will identify the area where the phenomenon to be studied.

1.       Does commercial bank has any role to play on     manufacturing industries?

2.       Is manufacturing sector has ability to raise loam from bank?

Hypothesis 1

HO: There is no significant relationship between commercial banking and manufacturing sector.

HI: There is significant relationship between commercial banking and manufacturing sector.

Hypothesis II                              

HOi There is no significant relationship between manufacturing sector and ability to raise loan from the bank

HOii There is significant relationship between manufacturing sector and ability to raise loan from the bank.

1.5    SIGNIFICANCE OF THE STUDY

The study will be important to the banking industry and manufacturing sector for the benefit of the nation economy in the following areas:

1.       It will offer recommendation on way of achieving and  enhance productivity in the banking industry by provision of credit to both small, medium and large scale farmer and industries.

2.       it will enable the manufacturing sector to performing well in  there productivity for the benefit of a nation by provision of technical and necessary advise through the commercial bank.

3.       Also. It will be a useful addition to  the literature on proper planning in the manufacturing industry.

1.6    SCOPE OF THE STUDY

          The study focuses on the role of commercial bank on manufacturing sector and management, trained staff and senior staff members of Skye Bank Plc. As respondents. While Skye bank maintain an interlinked branch network of over two hundred and sixty (260) in all part of Nigeria which her headquarter at 3 Akin Adesola Street Victoria Island Lagos, Nigeria.

1.6    LIMITATION OF THE STUDY

          Based on the topic of this project is to identify the impact of commercial bank in manufacturing sector in Nigeria .there are some factors which has been restricted the researcher to reach to the grassroots of the project. The following are the limitation confronted during the project work:

1.       Transportation

2.       Time limitation

3.       Inadequate financial research

1.8    DEFINITION OF TERMS

          The following are the terms used in this project work:

COMMERCIAL BANK:- Ibitoye T.A and O.A Ajayi (2001) Is a type of financial institution and intermediary. It is a bank that lends money and provides transaction, savings, money market account and that accepts the deposit on behalf of their customer.

LOAN :- Donald P. (2007)  An arrangement in which a lender gives money or property to a borrower and the borrower agrees to return the property or  repay the money usually along with interest at some future points in time.

FINANCE: Mercy Maranga (2009) Is the study of how investors allocate their asserts over a time under condition of certainty and uncertainty.

INTEREST:- Somoye (2010). It is a free paid by a borrower of assets to the owner as a form of compensation for the uses assets.

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