Impact of Banking Sector Reforms on Commercial Banks Sectoral Loans Allocations in Nigeria

Nigeria underwent through series of banking sector reforms since 1952 to date. Prominent among the reforms were Structural Adjustment programme introduced in 1986 and the most recent 2004 reform that resulted in formidable transformation in the Banking industry. This paper investigates the impact of Banking sector reforms on commercial banks loans advancement to four key sectors of the Nigeria economy namely; Agriculture, Manufacturing, Export, Mining and Quarrying.. Dataset pertaining banks capitalizations and amounts of loans disbursed to the economic sectors were sourced from Central Bank of Nigeria (CBN) statistical bulletins covering the period from 1987 to 2008. Using linear regression technique, the findings of the study reveal that there is positive significant relationship between banks capitalization and amount of loans allocated to the four key sectors of the economy by commercial banks. The result suggests that a constant upward review of the banks minimum capital base will improve commercial banks capacity to disburse more loans to the productive sectors of the Nigerian economy.