ABSTRACT
Discount houses were welcomed into the Nigerian financial sector in 1993, owing to the necessity for a well-established secondary market for the discounting and re-discounting of government securities and other qualifying financial instruments.
With more than ten years of discount house operations in Nigeria, it’s time to assess their specialized position in financial intermediation. Discount houses are established to achieve certain objectives/functions, including functioning as mediators between the CBN and licensed banks as well as between banks, according to CBN guidelines for discount house operation.
topic of discussion
This is an insurance item.
Underwriting
This refers to determining whether to accept or decline a risk, as well as the premium rate at which to accept it.
Catastrophe
This is a catastrophic loss that could jeopardize an insurance company’s existence.
Merger
This is the fusion of too many disparate businesses into a single entity.
market for insurance
This is where insurance plans are sold and bought.
Broker number nine
This is a type of insurance broker that connects insurance buyers and sellers.
Underwriter
In insurance businesses, the individual who evaluates risk.
Arbitiration
This is the process of resolving a count dispute by selecting an independent authority to investigate the situation and make recommendations.
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Every economy’s financial sector remains the same. The financial industry, of which Discount Houses are a part, plays a critical role in any economy’s rapid expansion. Let it suffice to remark that the role of financial intermediation – that of mobilizing savings from surplus units and making them available for investment by deficit units – is one that no contemporary economy can do without. Financial intermediaries emerge to connect the many economic sectors that already exist.
The intermediaries sell their own liabilities in order to raise funds, which are then used to buy the liabilities of other businesses in the economy.
As a result, financial intermediaries satisfy the portfolio decisions of the surplus units (SU) and deficit units (DU) in the economy at the same time.
The intermediaries sell their own liabilities in order to raise funds, which are then used to buy the liabilities of other businesses in the economy.
As a result, financial intermediaries satisfy the portfolio decisions of the surplus units (SU) and deficit units (DU) in the economy at the same time (Robert, 1996).
As a result, such savings are more likely to be reallocated to the most productive use. The economic production is increased.
Over the years, the Nigerian financial sector has experienced significant growth. This is notably true in terms of the number of existing institutions and financial instruments traded there. In particular, the Nigerian financial system’s money market sub-sector has experienced tremendous expansion and financial engineering.
The Nigerian money market has grown in three ways since its beginning in 1959: in terms of the number and types of instruments exchanged, in terms of asset growth, and in terms of the number of participants.
In terms of number of players, the money market’s supply and demand of short-term funds climbed from eight (8) in 1960 to 1,297 in 1985, and then to almost 2000 by the end of 1994. 130-135) (omolomo 1997:130-135) The structural Adjustment Programme (SAP) established by the Babangida administration, which brought with it the concept of economic deregulation, was partly responsible for this exponential increase in the number of money market operators. This approach gave rise to a new breed of banks and other financial institutions.
First Security Discount House Limited (FSDHL), Express Discount Limited (EDL), and Associated Discount Limited (EDL), and Associated Discount House Limited (EDL) were the Discount Houses (ADHL).
These dwellings had three key roles, according to Falegan (1993).
They are used to create a secondary market for government debt instruments in order to reduce the government’s reliance on CBN funding.
They contribute to the growth of the government securities market.
Aside from these functions, Discount Houses in Nigeria have carried out a number of others as mandated by the monetary authorities. Despite all of this, there are many questions concerning Discount Houses that have yet to be answered – ones that must be answered.
STATEMENT OF PROBLEM
The number of licensed Discount Houses operating in Nigeria has climbed from three to five now. However, it has been observed that the rise of these Discount Houses has not kept pace with the economy, particularly the financial sector. (1997, Omolomo).
Discount Houses, on the other hand, have not been particularly loud over the years because to their specialized nature. According to observations, a large percentage of corporate entities, institutions, and individuals who directly or indirectly participate in financial intermediation are unaware of the existence of Discount Houses and their specialized functions in the Nigerian financial system.
In light of this, it’s more important than ever to answer a few key concerns — questions that serve as the foundation for this research.
Since their inception in 1992, what unique responsibilities have discount Houses played in the Nigerian financial sector?
Is it still possible to get these services at a discount?
Are discount houses important for the country’s successful and efficient use of economic resources?
Are discount houses helping to grow and develop the financial industry, as well as the national economy as a whole?
5) Are other financial actors aware of Discount Houses’ existence and roles in Nigeria?
6) How frequently do other financial players in the Nigerian financial system employ Discount Houses?
7) Isn’t Discount Houses just a copy of Discount Houses?
OBJECTIVES OF THE STUDY
In order to evaluate the function of Discount Houses in financial intermediation in Nigeria,
To investigate whether Discount Houses increase or decrease the degree of economic activity in a country.
To determine the extent to which other financial actors are aware of Discount Houses’ existence and performance in Nigeria.
To determine the extent to which other significant players in the financial sector use or apply Discount Houses.
Determine the extent of inter-sectoral cooperation between banks and Discount Houses.
To identify the challenges and opportunities that discount houses face in Nigeria.
Any sort of intersection between the specialized tasks of discount houses and those of normal banks – i.e. any duplication of structure and functions – will be determined through an active survey.
making a recommendation
SIGNIFICANCE OF THE STUDY
The findings of this study will be valuable to discount house operators in determining how to place their discount houses within the financial sectors. This will ensure that they remain relevant in the industry.
The results of this study’s survey will reveal a great deal about the acceptability and popularity of discount houses among other financial actors, and will thus greatly assist discount house operators in becoming more innovative and creative in order to maintain and improve the level of acceptance of their performance.
Bankers and other financial system actors in Nigeria would be made more aware of the numerous potential benefits that can be realized from employing discount house services and products.
SCOPE AND LIMITATION OF THE STUDY
The purpose of this study is to assess, in a broad sense, the actions of discount houses as financial intermediaries in Nigeria.
While a critical examination of the origins and general functions of discount houses will be conducted, the scope of this research will be limited to the specialized role of discount houses in the financial sector, namely, intermediation with other financial institutions, particularly banks.
This research will employ an objective survey to determine how much, if at all, discount house financial intermediation has contributed to the Nigerian economy’s current level of growth.
As a result, the focus of this research will be on discount houses and their position as financial intermediaries between banks.
LIMITATION OF THE STUDY
The following are examples of this study’s imitators:
TIME: The study’s time frame is relatively limited, which will limit the amount of data that can be collected.
FINANCE: A study of nature will, in practice, necessitate a significant financial investment. However, the amount of money available to pursue this endeavor is restricted.
LIMITED DATA: It has been discovered that there is a scarcity of secondary data on Discount Houses in Nigeria. The supplies that are available are likewise sparsely spread around the country. This makes acquiring secondary data slightly more difficult than anticipated, especially when considering the time constraints of this project.
It has also been noted that the replies rate questionnaire administered has always been extremely low, indicating that many Nigerians are in some manner dissatisfied.
REFERENCE
Discount Houses in Express Discount Limited (2003)
Nigeria. http://www.Expdisc.com/11
Http://www.com/FAQS (2003 Sept 23)
Domestic Banking Abiodun, Hassan Kola (1998)
Pg1: Kingston Enterprises, Lagos
Financial Markets and Institutions, by Jeffrey Madura (1989).
Pp11, West Publishing Company, USA
Tino Years of Discount, A.O. Majekodunmi, A.O. Majekodunmi, A.O. Majekodunmi, A.O. Majeko
The Nigerian Treasurer, Vol. 5, No 3, July–Sept., House Operation: Challengers and the Future of the OMO.
NIC is the Nigerian Investment Promotion Commission.
http://www.nipc.org/publications/banking-and-finance-2002/banking-and-finance-2002/banking-and-
Org/infss.htm Nigeria (2003, Spet 24)
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