TABLE OF CONTENT
CHAPTER ONE
1.0 Introduction 1
1.1 Background of the study 1
1.2 Purpose of the study 2
1.3 Significant of the study 4
1.4 Lamination of the study 5
1.5 Definitions of the term 5
CHAPTER TWO
2.0 Names of selected financial institution 7
2.1 Roles of some selected financial institution 8
2.2 Objectives of Bank and other financial 17
Institution and their function 31
2.3 Problems facing financial institution in Nigeria
2.4 Roles of insurance companies in the development 39
Of the economy
CHAPTER THREE
3.0 Summary of findings, conclusion and Recommendation 43
3.1 Findings 43
Conclusion 46
Recommendation
CHAPTER ONE
1.0 INTRODUCTION
1.1BACKGROUND OF THE STUDY
The ideal of establishing indigenous financial institution come into effect after the end of the First World War (1914). This gave rise to the establishment of the national bank of Nigeria ltd in (1933), African continental bank ltd in (1947), but before the emergency of the indigenous banks, the standard bank (now first bank of Nigeria plc) had commenced banking operation in (1894).
In (1958), the central bank ordnance was passed out and it commenced operation in July 1st 1954. after the development may other financial institution sprang up. These includes development banks commercial banks, merchant banks, community Banks, insurance company etc. indeed their emergency was largely informed by the need to contribute positively to the growth and development of Nigeria economy.
In Nigeria today, there are about one hundred and sixty-eight (168) banks and over ninety-four (94) insurance companies operating various business of large scale dimensions.
As the economic government stands at the moment, it is one that really posses a challenging task before all these financial institution. Our financial resources need to be properly and judiciously utilized. Small –scale industries as well as adequate funds in their stages of development need adequate funds to put them on solid footing. Farmers equally need sufficient credit facilities to enable them put more effort in agricultural investments.
In the same vain, individuals as well as government need money to embark on valuable and profitable economic ventures. Against these for going background, it is evident that the Nigeria dream of building a safe and sound that economic structure will come to nothing in the absence of revable and well tailored financial institutions. For better understanding of this research work, I have organized these work-ups into chapters.
Chapter 1-3, which includes this introduction embodies, names of selected financial institution and the three looks at the problems confronting financial institutions, conclusion and recommendation,
1.2 PURPOSE OF THE
As already pointed out in the introduction, it would be recalled here that the establishment of the central bank in (1968) gave rise to the emergency of several others indigenous financial institution in subsequent years. The aim behind the establishment of such institution was to promote and foster rapid economic development by financial indigenous businessmen in both industry and commerce.
Against the background therefore, this particular study tried to fund out whether these financial institution measures up to the following exception for which they were established.
i. To join foreign skills and expenses and foreign private companies with Nigeria skills and capital in the development of new industries and expansion of existing ones.
ii. To create alternative opportunities for investment in Nigeria industries.
iii. To work closely with the various government and state development cooperation.
iv. To provide equity capital and funds via loans to indigenous firms and institution for either short-term medium-term or long-term investment in commerce and industries.
This study also tried to ascertain the authorized share capital of these institutions as well as the methods and capacity of funds disbursement to industrialist and other commercial entrepreneurs with a view to fostering economic development of Nigeria.
1.3 SIGNIFICANCE OF THE STUDY
The ideal of setting up of the various financial institutions in Nigeria was that, they would in no small way speed up the economic growth and development of the nation.
The significant of this study can be achieved by giving loans and offering sound financial advice to the industrialists and entrepreneur their investment advices.
The study of the roles of finance institution in Nigeria economy will not only enhance the economy viability of the country, but will also improve the standard of living of the people. This is because job opportunities will be opened up for the unemployed.
Again, this study i significant because it brought out great focus on the number of activities performed by these financial institutions geared towards meeting the economic and financial objectives of many Nigeria and consequently putting the nation into a sophisticated level of economic development. It is also high lighted that effort made by these institution to bridge the gap existing between the Nigeria economy and that of the economic of the highly industrialized countries.
1.4 LIMITATION OF TERMS
This research work title “THE ROLE OF FINANCIAL INSTITUTION IN THE DEVELOPMENT OF NIGERIA ECONOMY” covers a very vast area. Due to obvious financial constraints and of cause for purpose of management, I deemed if necessary to restrict my study to financial institution within Enugu Urban. Some of these selected financial institutions include the central bank of Nigeria, commercial banks, merchant banks, Development banks, community banks and insurance companies e.g. Universal insurance company ltd.
In choosing these sample representatives, financial institutions, I have limited my research in these areas of operation of these institution that enhance the nations economic development and influence drawn from them to apply to other financial institution faced with the sole responsibility of economic development in Nigeria, have the same aim and objectives to enhancing the economic development or growth and making her economic vibrant and comparable with other prevailing economic in the competitive international economic system.
1.5 DEFINITION OF TERMS
i BANK: A bank can be defined as any person or corporation that provides the minimum banking services and which is licensed as a bank by the federal government of Nigeria as a banking institution.
ii. CENTRAL BANK: The central bank is the central of a country’s financial system.
iii. MERCHANT BANKS: This is the type of bank that provides long and medium-term loans and advance for trade and industries.
iv. COMMERCIAL BANK: This is a bank that specialized in keeping money and valuables safely.
v. CHEQUE: A cheque is a simple instruction to a pay a certain sum of money to the person named on the cheque or the bearer of the cheque.
vi. LOAN: A loan can be defined as a sum of money been lent to customers for their day to day business.
vii. INSURANCE: Insurance is a contract by which one partly undertakes to indemnity another against loss damage.
viii. CAPITAL: This includes the contributions of shareholders and undistributed profit.
ix. DEPOSITS: These are current and savings account with the bank. Deposits and currency note are the largest liability item of a bank to the public.
2.0 NAMES OR SELECTED FINANCIAL INSTITUTION
Financial institution companies of many institution that deals mostly in money transmission in the economy. These institutions relate mostly to banks and non-banking institution they are under banks we have.
i) COMMERCIAL BANK: Which specialized in keeping money and valuable safely? Examples of these banks are Access bank plc, bank of the North, ltd first bank plc, etc.
However, these banks also grants short-term loans or advance to individuals and cooperate bodies. It also offers three types of Account i.e. the current, savings and fixed deposit Accounts.
ii) CENTRAL BANK: Which is the center of a country financial system? It is only one in any country; they act as banker to the federal and state government and the commercial bank. It is also responsible for formulating banking regulation.
iii) MERCHANTS BANK: Is a specialized bank which facilities commerce and industry in a special ways, for example dealing on foreign exchange, administering the issue of new share and acceptance of bills of exchanges. The major activity of merchant bank is the provision of long and medium –term finance for trade and industry. The merchant banks operating in Nigeria ABC merchant bank (NIG) ltd, first city merchant bank etc.
4) SAVINGS BANK: Are non- profit marking banks established by the government to encourage saving among the low income group of the society. These banks are generally established by the government of a country to encourage the habit of savings among the low income members of the society.
The federal saving banks and the federal mortgage a bank was well as building societies are included in this category of banks.
v) DEVELOPMENT BANK: These are government owned banks which have the major functions of providing long-term loans to farmers, industries, businessmen and government projects to develop the economy.
Example of development banks are as follows
1) Federal mortgage bank of Nigeria, Nigeria agricultural and co-operative bank Nig. Etc.
2.1 ROLES OF SOME SELECTED FINANCIAL INSTITUTION
As early mention in section 2.0 some of these financial institutions play a very important role in the development of Nigeria economy and some of these roles are or includes
1) COMMERCIAL BANKS: Commercial banks are viable financial institution do inform a number of significant roles in the development of Nigeria economy.
One of th
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