Bank Lending Effects and Economic Productivity in Nigeria

This study examined the impact of bank lending to the agricultural, manufacturing sectors and economic productivity in Nigeria. The findings revealed that lending to the agricultural sector positively influenced productivity, suggesting that targeted financial support enables farmers to invest in inputs, adopt technologies, and expand operations. In contrast, lending to the manufacturing sector negatively affected productivity, indicating that current credit allocation and utilization patterns may be inefficient, with misallocation of funds, delayed returns, and structural challenges limiting the impact. Overall, the results highlight a sector-dependent divergence in the effectiveness of bank lending in Nigeria, with agriculture benefiting most, while manufacturing require improved targeting, management, and institutional support to generate positive economic outcomes.