THE EFFECT OF BANK SECTORAL CREDIT AND EXCHANGE RATE ON FINANCIAL PERFORMANCE OF LISTED MANUFACTURING FIRMS IN NIGERIA

Abstract

The study examined the effect of deposit money bank’s credit facilities and exchange rate on the corporate financial performance of listed manufacturing firms in Nigeria. Data for the study were sourced from the annual reports and accounts of the sampled firms for the period of ten years spanning from 2013 to 2022, the collected data were analyzed using Panel regression analysis, result of the analysis showed that credit facilities had a significant and negative effect on the financial performance of the sampled manufacturing firms in Nigeria. It was also revealed that the effect of the exchange rate on the return on assets of manufacturing firms in Nigeria is significant and negative. Accordingly, the study concludes that sectoral allocation and exchange rate are significant determinants of financial performance. Considering the negative and significant effect of sectoral allocation and exchange rate on the profit of manufacturing firms in Nigeria the study therefore, recommends that the government of Nigeria should implement policies that would encourage lending and also ensure a stable exchange rate.