The Nigerian bank for commerce and industry is?

Step 1: Analyze the question The question asks what type of financial institution the Nigerian Bank for Commerce and Industry (NBCI) is.

Step 2: Explain the concept Nigeria's banking sector includes several types of institutions:

• Commercial banks accept deposits from the public, give short-term loans and offer everyday banking services (e.g., GTBank, Access Bank).
• Merchant banks offer specialised services to businesses, such as underwriting shares, issuing securities and giving corporate financial advice.
• Development banks provide medium- and long-term finance for developing particular sectors such as industry, agriculture and commerce. They are often government-owned and are set up to promote economic development rather than to maximise profit.
• Industrial banks are a type of development bank that focuses on financing industrial projects. (The Nigerian Industrial Development Bank, NIDB, is an example.)

Step 3: Apply it to the NBCI The NBCI was established by the government in 1973 to give financial and technical support to indigenous (Nigerian) entrepreneurs, particularly in commerce and small and medium-scale industry. It offered long-term loans to promote business and industrial growth. This makes it a specialised development financial institution, not a regular deposit-taking commercial bank or a merchant bank.

Why not option C? The name includes "commerce" as well as "industry", so its mandate went beyond industry alone. The broader category it belongs to is the development bank.

Step 4: Answer The Nigerian Bank for Commerce and Industry is a development bank, which is option B.

Step 5: Exam tip Remember that Nigerian specialised banks are usually classed as development banks: the NBCI, the Nigerian Agricultural and Cooperative Bank, and the Nigerian Industrial Development Bank. If a bank's name says "development", "agriculture", "industry" or "commerce" and it is government-backed, think development bank first.