THE IMPACT OF BANK OF INDUSTRIES IN INDUSTRIAL GROWTH AND ECONOMY

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY
The impact of development banks as catalysts for growth and development explains the global recognition of their significance particularly in the developing nations. They have in various countries been the prime movers of the development with their activities spanning through various sectors of the economy.

The government of most developing countries said the need to raise the pace of economic development and industrial development for the simple fact that outside Agriculture, private sector activity was weak or non-existence.

Developing financial institution was seen as a vehicle to promote and finance the growth of private. It is pertinent to note that the main stream business of banking. Comprises: Retail banking as practised by commercial comprises banks and developing banking as practiced by development financial such as the Nigeria Bank for Commerce and Industry (NBCI), National Mortgage Bank (FMB), National Economic Reconstruction Fund (NERFUND) amongst others.

Although, these categories of banks share a common impact in facilitating the mobilization and conversion of resources into investable funds.
However, they differ in their economic objectives and investment policies, whereas the commercial and Merchant Banks are propelled and sustained in their investment activities by the drive towards maximization for the benefit of a social sub-group like shareholders, business community. Etc the development banks are designed to facilitate a broader objective of accelerated economic and industrial development for the benefit of the entire nation.

The development financial institutions like the bank of industry (BOI), NARCDB are major players in the Nigerian Financial industry as an integral part of the country’s financial system. they have a critical share of the systems all important intermediation roles in the saving investment, process a major variable for increase in investment production capacity, natural output and employment.

Development banks have contributed immensely to industrial development in Nigeria. There has taken various forms which include financing of short, medium and long term investment project, acquisition and domestication of foreign technology through joint venture agreement, identification and training of potential entrepreneurs, mobilization of funds for one lending operation amongst others.

1.2 STATEMENT OF PROBLEM
The poor economic performance has become particularly noticeable in the 80’s despite the high priority given to industrial developments as a vehicle for economic self reliance and various problems that crops up in the 90’s till date. A critical look at the Nigeria’s industrial scene portrays a number of factors militating against Nigeria’s industrializatioin efforts.

These factors include:
a. The cost of promoting entrepreneurship has been rather too high as compared to foreign controlled enterprises.
b. The country is saddled with kind of problems generated by technology dependence, which little or no research is carried out into developing local engineering and encouraging adaptive technology.
c. The shortage of finance and foreign competitions or domination are also some of the limiting factors in industrial growth.
d. Sanctions placed on the country by the international community.
e. Poor managerial ability of the applicants and inadequate socio-economic infrastructures:

All these factors stated above, form the subject of mitigation of this project.

1.3 OBJECTIVES OF THE STUDY
The major objective of the study aimed to examine how the development banks enhance industrial and economic development.

And other specific objective of the study includes:
a. To evaluate the role of bank of industry in financing industrialization
in Nigeria.
b. To evaluate the extent of bank of industry contribute to the industrial growth and development in the Nigerian economy.
c. To evaluate the need for development bank in Nigeria.
d. To evaluate the problems of industrialization and efforts that are being put in place by government and development banks in solving them.
e. Finally, to examine industrial and economic development.

1.4 RESEARCH QUESTIONS
a. What are the effects of adequacy or otherwise of industrial finance?
b. Is finance the only factor to be considered in the industrialization efforts of BOI?
c. How far have development bank i.e Bank of Industries (BOI) been able to bridge the gap sector of the economy?
d. What are the strategies to adopt and efforts to intensify to achieve the above
e. What is the relationship of BOI’s disbursement of funds compare to its company clients project cost?
f. What prospects are there for industrial financing and development?

1.5 Statement of hypothesis
Hypothesis is a conjugal statement postulate or a proposition about an assumed relationship between two variables.

Null hypothesis (Ho), is stated in a negative assertion, while the alternative hypothesis (Hi)

(Hi) is stated in a positive assertion
The rejection of the null hypothesis signals an acceptance of the alternative hypothesis and vice-versa.

Having considered the form of hypothesis to be used, this study shall test for the following hypothesis.

HYPOTHESIS 1
Ho: Finance is not one of factor to be considered in the
industrializations efforts of BOI.

Hi: Finance is one of the factors to be considered in the
industrialization efforts of BOI.

HYPOTHESIS 2
Ho: Bank of industries (BOI) has not been able to bridge the gap sector of the economy.
Hi: Bank of Industries (BOI) has been able to bridge the gap sector of the economy.

HYPOTHESIS 3
Ho: There is no prospect for industrial financing and development.
Hi: There is prospect for industrial financing and development.

1.6 SCOPE AND LIMITATION OF STUDY
This research work will focus attention on the role of bank of industries (BOT) in industrial growth effects and economic development in Nigeria and measures adopted by financial sectors in developing human skills.

Never – the –less, it was noticed that most human endeavours are subjected to some limiting factors, the research effort of this nature is therefore met an exemption considering the duration of this research work and limited resources in terms of fund and time available to the research personnel, it is impossible for the study to be exhaustive.

1.7 Definition of terms
In the course of the research, terms that will be seen in the context of writing is defined as follows:

a. Financial institutions: These are banks and other institutions that land out money and carry out banking and non-banking functions.
b. Network Branch: These are outlets or offices extension spread over different regions.
c. Investment funds: This is the money supplied to the development banks regularly out intervals for efficient implementation of development lending. All other terms that will be used in the research study will be clearly stated and defined.


1.8 Plan of the study
The first chapter of this research work entails the background of the study, statement of problems, objective of the study, justificatioin for the study, research questions. Etc while chapter two, literature review entails the definition of development banking, financial sector and economic development, rationale for development banking evolution of development finance institutions in Nigeria, development finance institution in Nigeria, functions of development banks etc.

Also, chapter three look into research methodology and while chapter four of the research study include data analysis and results.

Finally chapter five shows the summary of the research, conclusion and recommendation.


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