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The role of commercial banks in industrial development of Nigeria (A case study of Union bank plc Bauchi)


This study was on the role of commercial banks in industrial development of Nigeria (A case study of Union bank plc Bauchi. The total population for the study is 200 staff of selected Union bank plc, Bauchi. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made HRMS, accountants, customer care officers and marketers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies.

Chapter one


1.1Background of the study

Commercial Banks and Industrial are synonymous as the growth of one enhanced by the other. Precisely, banking operation is an accent business which was already in the accent Babylon during the classical civilization, particularly in Rome.  But modern banking started in Italy where banker apart from buying and selling of foreign currencies also took demand time deposits.

Therefore, this banking habits remained in Italy and other development nations until in the year 1894 when British Bank of West African (BBWA) came into being, now called First Bank of Nigeria Plc, which was established in Lagos, founded by a shipping manager from Liverpool, sin Alfred Jones. Then in 1917, Barleys Bank Ltd, now called union Bank Plc was established to challenge the monopoly of the BBWA. Union Bank has now the largest number of branches located all over the country.


In the same vein, Industry is as old as man on earth. Even the inception of the industrial revolution which scattered industries to all nooks and corners of the world claimed to be the originator. With good communication and banking networks, a lot of industrialists potential ones are attracted from all works of life to their industries here in this country. Consequently, it will be understood in the subsequent chapters that the abundant assistance rendered to the industrialists by the commercial bank to a large extent helps in the development of Nigeria at large. Though both bankers and industrialists are a times faced with problems. And this research work made honest attempts to expose some of the problems and recommend possible ways of arresting those problems.

Evolution and development of Commercial Banks in Nigeria

In the First stage of this these, we did say that banking operation is an ancient business. Even before the break of industrial revolution, there were banks in the ancient City of Babylon, but the System of their operations were very crude. At this time, the procedure was that the owner visiting the banker who sat baking his bench or table through cheques were not yet known. Thus, the current term “bankruptcy” comes from the banker who could not pay-off his creditors. The most famous of these grew at of the customer of goldsmiths who took gold and silver from customers for safety keeping. They later discovered that they could lend such coin out and as certain proportion as revenue since not all customers came in for payment at the same time. To make this transferable, goldsmith issued the receipts in round number forms. Thus, serving as primitive bank note, but repayable on demand by the bankers in gold or silver. Hence, we can say that goldsmiths note becomes the precursor of modern banks note and goldsmith become the forerunner of modern banking.

Banking in Nigeria dated back to 1894 when the British or west African (BBWA) was established by taking over corporation itself established two years earlier in 1892, since that time, the foreign banks dominated Nigeria banking scene until 1913 when the national bank of Nigeria enraged to become the first indigenous bank in Nigeria. However, the origin of British bank of West Africa (BBWA) which later changed its name to a standard bank of Nigeria Ltd, and currently to as first bank of Nigeria Plc cannot be treated in an Isolation of Elder Dampster. Elder Dampster line, which name as become synonymous with shipping and maritime trade in West Africasub region, was name after Alexander Elder and John Dampster.


In 1899, Anglo African bank was established at Cross River State, Calabar by the Royer Niger Company. The bank was later changed its name to Nigeria bank Ltd, but was later brought over in 1912 by BBWA. Then, in 1917 Barleys bank Ltd now know as  Union  Bank Plc was  established to change the monopoly of BBWA. It was remarkable that between 1929 to 1952, many indigenous banks were established but most of them collapsed under misadministration.

Union bank was incorporated as Barleys banks of Nigeria Limited on march 13th 1969, it was late changed to Union Bank of Nigeria Limited.

More so, the recent problem of distress facing some of our commercial banks especially our new generation banks, there is every tendency that the increase, impart Union bank stated not as a chance phenomenon rather for the basic social and economic needs for the society. The needs especially as concern industrialist no small measure will be seriously looked into in the next stage of this research work.




 1.2.    STATEMENT OF THE PROBLEM                    

Commercial banking is grouped in the serious industry, the quality of services rendered by our banks have been attracting criticisms from people in all work of life. The government functionaries, industries, the media and the general pubic are all very critical of such banking services, the complaints ranged from the those of long delays in cashing cheques, tenderness in granting loans and or credit unfriendly attitude of banks works.



The objectives of the study are as follows

(i)     To identify the problems facing the industrialist as regard to finance.

(ii)     To find out how industrialists obtain their loans from the banks.

(iii)    To determine the problems facing them in paying back the loan.

(iv)    To ascertain effect default in loan repayment has in the banking business.

(v)     To identify the best solution in handling the problem.

(vi)    To identify whether Commercial Bank charges high, moderate to industrialists.


The modern world scientific observations and investigations help us to eliminate greater risk of uncertainties in this research works there are two major schools of thought with two alternatives hypothesis as a trend to solution of this research problem.

(1)  Ho:    Industrialist have no problem in obtaining loans

Hi:     Industrialists have problem in obtaining loans.

(2) Ho: Commercial banks loans have no impact on industrialist development in Nigeria.

Hi: Commercial banks loans have impact on industrial development in Nigeria.


When we talk of the significance, we mean the benefits to be derived in researching the case. In this case, on completion of this work, Industrialists and potential ones will take advantage or the researcher exercise to know the simplest and cheapest means of fund sourcing through the banks rapid development of their industry. Moreso, they will benefit know expert ideals and advice of the banks to obtain a greater height in their business


The scope of the study is aimed at liberalizing the minds of the industries on the best means to organize and utilize loan granted to them by commercial banks judiciously, beside the need for the industrialists to adheres strictly to the credit terms, credit period cannot be over emphasized as born funding services as till that lubricates the industries. On the other hand, banks should carryout heavy enlightenment campaign to educate some of illiterate industrials on how best to shamed their request to the banks for easy handing. This could be done by organizing seminars, workshops, visit etc to the industrialists and potentials ones. Also, this thesis mounted an intensive research on common features of commercial banks types of loan and measures for security such loans, sources of fund and loan advantage, some problems facing both commercial banks and industrialists regarding loans were also focused.




This study is limited, based on the fact that there is no time, money and material resources to see to the whole commercial banks in Nigeria. The study is limited in Union Bank of Nigeria Plc. Onitsha and the findings may not reflect the situation in the whole country and also may not be valid for the whole commercial banks in Nigeria, but by the Large what happen in Union Banks in Onitsha can be said to apply to the other banks.


Commercial bank: The term commercial bank refers to a financial institution that accepts deposits, offers checking account services, makes various loans, and offers basic financial products like certificates of deposit (CDs) and savings accounts to individuals and small businesses

Industrial development: Industrial Development is the synthesis of contributions from four major factors, namely, Business, Technology, Government and Labour and successful industrial projects can be achieved only through a close co-operation and mutual understanding between these contributors.



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