ABSTRACT
The manufacturing sector of the economy is the most important sector and for obvious reasons it is affected by the unprecedented increase of banks high lending rate to borrowers. To appraise the effect of this situation prompted this study so as to provide theoretical and empirical evidence on the effect of high bank lending rate on the manufacturing sector of the Nigerian economy. Also, to determine the manufacturing sectors capacity, product pricing and sectors profitability. Questionnaires were designed and distributed to elicit information from the sample population; also, data were gotten through primary and secondary sources. These data collected were presented and analyzed by means of tables and percentages. The hypothesis adduced was tested using such tools as chi-square. Results have shown that the manufacturing sector has been constrained due to the inadequate funding culture of Nigerian banks and banks no longer want to lend on a long term basis, even when they lend, it is at cut-throat and high interest rates. Therefore, banks who are the ultimate source of bank loan should realize that, manufacturers are quality customers and bank rate should be a dialogue between the two sectors so that the manufacturing sector could survive and interest rates need periodical adjustments so that there would be increase in the level of investment.
