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The Role Of Banking And Finance In The Development Of Nigeria Economy
CHAPTER ONE
1.0 INTRODUCTION
The history of Banking in Nigeria started back in 1892 with Eider Dempster company which engage itself in the business of moving coins around the country, later that year African banking cooperation was found which provide services to elder Dempster company failure of the bank led to the formation of bank of British West African, but between 1929 – 1951 lead the establishment of indigenous bank and even more today where a lot of them have collapsed as result of mis-management, under capitalization among the factors.
Bank have crucial role to play in a nation’s quest economic development. They serve as major institutional mechanism for mobilizing resources from surplus unit of the economy and channeling these to deficit unit through credit expansion. According to Usman (1997) Bank occupy center stage in the effect of accelerating of both local and foreign resources for investment purpose”. In any economy, the financial system is the hub of productive activity, as it perform the vital of financial intermediation. It is the primary provider of payment services and fulcrum of monetary policy implementation.
As cited by Dicko (2005) the neo-classical production theory identified capital and labour among others as critical factor determining growth in output. But in developing countries with abundance of cheap labour, capital is very scare and expensive. The financial institution by providing the much need capital for output the growth fill an important gap in the development process”.
It could also be emphasized that there have been significant contribution by post Kenyesians economist such as Devidson (1994) and Mishy (1975), following the seminal work of Melemon (1973) and Shaw (1973). They emphasis that financial system does matter in facilitating economic development under a liberalized and reformed environment. Dikleo (2005) is of the opinion that the concept of development and growth has universally transformed to a wider phenomenon. Some 50 years ago it focused on economic variable only.
Today it encompasses indicator (HDI) have replaced the tradition per capital income’ as indicators of development”. The main thrust of his project is to identify whether the financial system and the banking system in particular has been able to social economic roles of equitable wealth creation.
1.1 BACKGROUND OF THE STUDY
This project centers on the role of Banking and Finance in the development of Nigeria economy with particular reference to united bank of African (UBA) Nasarawa Branch.
The project will give a highlight on the development of banking in Nigeria and laid down emphasis on the different kinds of Banking and their various function of the effect the economy.
Nigeriahas a vital growing market in African and has a recent years acquire important role in the world economy with a population of 120 billion (appropriately) people which endorsed with the fast and largely untapped natural resource with petroleum being the major foreign exchange earner. Nigeria banking system evolved it increasing assisted in resources mobilization for economic development prior to the establishment of the central bank of Nigeria in march 1958 operate as rudimentary banking system tailored to need of British government, had been as existence in the Nigeria.
Banking has contributed immensely to the Nigeria economy, it has provided services of employment opportunities and services to the masses on the businessman, client and the government from to time. There are various bank that can be classified or mention e.g. Central Bank, Universal Bank Merchant bank and Mortgage bank etc. the universal bank can be identified by the services they render such as saving bill of document and act as an agent to the customer, granting of loans, import and export financing. The universal bank institution in Nigeria can be classified into two major groups. These are purely indigenous bank owned 100% and minority foreign interest.
However, prospect is therefore aimed at high the impact of the universal bank in the economic development of our great nation (Nigeria) by appraising their performance.
The introduction will not be complete without recognizing the apex of the banking industry that is the central bank of Nigeria (CBN) which is charged the responsibility of maintaining the monetary standard and sound financial structure with objective of creating approximately environment for economic growth and development.
1.2 STATEMENT OF RESEARCH PROBLEMS
The impact of bank services especially universal bank cannot be over emphasize. The main reason for this research work is to discover the problem militating against their operation, these problem have to be consider with the aim of giving relevant suggestion for improvement, the problem there among other things included.
Bank include those of poor record keeping, poor account system, embezzlement, fraudulent practice, poor organization planning control and loan portfolio management, problem of competition, the market for banking service is not homogenous its differentiation by preferential to the characterized of client or customer and by the traditional to which banking houses are accustomed.
1.3 OBJECTIVE OF THE STUDY
The objective of this study are:
i. To investigate the manner through which united bank for Africa plc, Nasarawa branch make credit facilities available to their customers.
ii. To find out the response of customer to various credit facilities and their disposal.
iii. To explore other means of financial assistance available to industries if any. It seek to discuss the role impact and implication of the policies and strategies of the government and stages of government and the Central Bank of Nigeria (CBN).
1.4 RESEARCH QUESTION
This is done to enable the researcher to gather information about his finding and to enable him solve the problems which his is faced with and this will be done through:
i. Conduction of interview with the management
ii. Questionnaire
iii. Personal experience for example what are usually the reaction of the share holders?
1.5 RESEARCH HYPOTHESIS
The following hypothesis is becomes relevant in this study.
1. H0: does the nature of Universal Banking in Nigeria affect the economy development
H1: The nature of the universal Banking in Nigeria does not affect the economy development.
2. H0: The banking service does not have a role to play in the economy development
H1: The banking service have a role to play in the economy development
3. H0: Does banking sector been able to develop the economy in Nasarawa state.
H1: Banking sector has been able to develop the economy in Nasarawa state play in the economic development?
1.6 SIGNIFICANCE OF THE STUDY
The research is significant to business and to Universal bank, the government and any person intending to invest in Universal bank to also help investor both in public and private sector of the economy. To specific roles played by Universal bank in the development of economic which may include bank facilities and consultancy among others. It may enable the general public to realize the role and importance of universal bank toward economic development. The study will also enable utilize polytechnic who may want to know the role of banks.
1.7 SCOPE OF THE STUDY
The scope of the study is to look into impact of the universal bank in an economy as well as the way universal bank in Nigeria carry on their business in respect of development. It will however look at their agricultural financial scheme. This project goes further to look into problem facing universal bank and suggestion ways of improvement, the history of universal bank from 18-92-2000 will be looked into.
1.8 DEFINITION OF TERMS
Bank: A bank is a financial institution owned by the shareholder, the public or the government. These money and other valuable thing are kept. They give loans and overdraft to their client and perform other related universal activities to them.
Banking Services:The banking act of 1969 define banking or banking business as “The business of receiving monies from outside source as deposit irrespective of the payment of interest and granting a money loan and acceptance of credit or the purchase or bill and cheque. The purchase and sale of securities for account or other measuring of the obligation to require claims in respect of loan prior to their maturity or the assumption of guaranties and other warrantee for others.
Ceiling of Credit: This is the limit beyond which bank are not allowed to exceed in their lending policy usually given by central bank of Nigeria.
Customer:Account to legal decision by Lord Daley on great western Railway versus London and countey Bank in (1901) defined a customer as any person who as some sort of any account either deposit or current account or some relation with a banker”. Some of the required to be customer must be a major (not an intact or minor) not an insane person and he or she must have been bared by any court of law.
Overdraft:These are usually terms facilities design to improve export working capital as well as reduced problem.
Capital:Refers to money raised to start business or money invested in business.
Saving:Refers to money ledged or kept within a bank for safety purpose and interest is calculated and payable to the customers.
Bank Note: Refers to a price of paper money with value printed on it.
Negotiable of Bill:This is meant that bank purchase an outward bill for collection drawn by export or importer abroad such purchase would be made before the bill or remitted. Abroad for collection. A regular export can arrange a negotiation line up to an agreed limited with bank.
Letter of Credit: A bank at the instance of foreign buyer can authorized a Nigeria bank through an oversea bank to the importer have complaint of inadequate fund to finance the export to the oversea budget.
Loan syndication:It is a system whereby some one or more banking (financial institution) jointly arranged a loan for a client for a specific project.
Export In Financing:Can be defined as the activities of government of a country it is agent to promote an increase the financial aspect of an exported from the country to another country.
Bank Distress:This occurs when a bank is unable to meet up with or honour its current maturity financial obligation as they fall due for payment. This is also called technological insolvency and it donate only lack of liquidity.
Debt Factoring:This involves turning over the responsibilities for collecting a for debt to a specialized institution. It is an outright sole of debt to a financial company from cash to be realized for any immediate use if could be with or without resources.
Collateral Security: These are pledge or guarantee made or shown to the banks to secure a loan from the bank as supplement to some more marketable asset which include building, plant machinery, motor vehicle, when customer failed to redeem this pledge i.e. refuse to repay the given loan at the stipulated time, the bank will exercise its right at lien and auction those to recover their money plus the actual interest.
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 MEANING AND BACKGROUND OF BANKING IN NIGERIA
According to agricultural credit act 1928 of Great British a bank is defined as any firm incorporation, company or society carrying on banking business.
Also Dr. H.L Hart on eminent banking authority an England in his book law of banking defines a “bank as a company carrying on business of receiving money and draft upon them from time to time by a customer to the extend of the amount available on their current account.
According to Dr. Wale Adewunmi in his book banking and finance in Nigeria Graham Born London (1989) agreed that the quality and usefulness to an extend by the manner of efficient staff by his action and without saying one word to that effect invited you to come back next time and even to encourage good image of bank. According to Dr. Wale is build through advertisement, publicity a contract with a nudle is efficient staff of bank remove and best badly client that images
According to Sayer’s (1961) in his book modern banking gave detail definition of bank thus: ordinary banking business consist of changing cash from bank deposit from person or incorporation come (one deposit) to another, give bank deposit in exchange for bill of exchange government bond, the secured or insecured promise to business to repay etc. from the legal view point section 41 of banking act 196 (formally, banking decree 1969) defined a bank as any person carrying on banking business and this include universal bank, and acceptance house, discount house and financial institution, and in his definition banking business means the business of receiving money from outside sources as deposit in respective of payment and granting of money loan and acceptance of credit or the purchase bill and cheque or the purchase of security for account of other or the incurring of the obligation of the acquire claims in respect of loan prior to their maturity or clearing and such other transaction. Oleshore O. in his paper presented in banking management in Nigeria at the banking and financial lecturer of department economy university of Ibadan (1984) in a matter in one his speech is of the view that customer must not been made that the bank is doing him a favour. That no amount of service, Bally – Goo advertisement or glumick can substitute for good performance and service, which phase the customer, employees should be fully inform about subject important the bank such as policy, operations, services and objections.
However, it is a historical fact that deposit of establishment of indigenous bank universal in Nigeria is never the less dominated by the expatriated led to indigenizing the whole system.
G.O Nwanko on his book Nigeria Financial System Macmillan banking facilities in Nigeria are provided by expatriate bank led to the establishment of indigenous bank. On the other the satisfaction facility provided by the entire banking system as led to attempt to indigenalize the whole system.
According to Mr. Paul A. Ogwuna then the governor of the Central Bank of Nigeria in a lecture delivered at the National Institute of Banker (NIB) annual seminar said that in other to facilitate the growth the authorities need to stimulate the money market by introduction of routine rediscount facilities without to support medium and long term lending.
According to Dr. Orji H.O managing Director and chief executive progress bank in an article he feature in the Central Bank of Nigeria Bullion Vol. 13 April / June (1991) an appraisal of the Nigeria financial system said that the process of economic expansion might occur due to improvement in the financial system as potential in adequacy linked with the potential real investment and that as the financial constrain to development become acute in the 1980’s the banking sector traced up challenges by harnessing the available capital and saving in the system for potential investors.
BIBLIOGRAPHY
Alumda A.S. (2002); the scope of business 1stedition Ade press, Ibadan P, 7-15
Adeleante F. (1983); the plement of banking in Nigeria, Fand A Publisher Ltd Lagos P. 105-230
Halivu (1982); Money and Banking Addison Wesley publishing coy, Philip Finese P. 10-15
Jimoh A.B. (2002); Introduction of banking operation in Nigeria Sal – Ado venture, Enugu P. 10-15
Joe A.V. (1984); Modern Method of Processing Data Vol 32 third Edition, frankwood, london P. 10-15
Nnamdi A.U. (1991); Research Methodology in the Behavioral Science Longman Nigeria plc. Ibadan
Nwaho G.O. (1980); Nigeria Financial System Macmillan, vol,2, third Edition, Mc Graw Publisher London, No, 18-21
Philips T- (1991): the role of Banking System in the Management of the Economic, Vol No. 2 billion publication if the CBN 8-19 April.
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SOLD BY: Excellent Project| ATTRIBUTES: Title, Abstract, Chapter 1-5 and
Appendices|FORMAT: Microsoft Word| PRICE: N5000| BUY NOW |DELIVERY
TIME: Within 24hrs. For more details Chatt with us on WHATSAPP @ https://wa.me/2348055730284
