An Examination Of The Impact Of Failed Banks On Nigeria Economy (1995 – 2005)

An Examination Of The Impact Of Failed Banks On Nigeria Economy (1995 – 2005)

Abstract

This exploration work in failed banker is with a view to examine its impact one the Nigerian frugality. The statement of problem in this exploration work aimed at chancing if there are reductions in the inflow of inventible coffers that could be conducted to the productive sector of the frugality.

Section II showed how the experimenter made a arbitrary selection of 100 repliers from 3 selection banks arrived at a sample size of 50 which implies that 50 questionnaires were distributed and all were returned.

This is followed by relating the forms and causes of bank failure in Nigeria banks in section III; this section was what the experimenter was suitable to do which other experimenter failed to do.

Section IV the major finding was added up in just one judgment which is “ Bank failure has nearly crippled Nigerian frugality and this implies that bank failure retards the frugality’s rate of capital conformations and eventually the face of profitable growth concluding with section V the experimenter suggests that farther experimenter should probe on the part of financial authorities in bank failure forestallment.

CHAPTER ONE

preface

Background of the study

Statement of the problem

ideal of the study

exploration questions

exploration thesis

compass of the study

Limitation of the study

description of terms

References

CHAPTER TWO( Literature Review)

Review of affiliated literature

description of failed banks( via bank failures)

Review of the evolving patterns of bank structure and failure

Extent of bank failure in Nigeria

The impact of bank failure on Nigeria frugality

Factors behind bank failure in Nigeria

sweats to address bank failure in Nigeria

References

CHAPTER THREE( Research Methodology)

exploration design and methodology

exploration design

Area of study

Population

Sample and slice procedure

Instrument of data collection

styles of data donation

styles of data analysis

References

CHAPTER FOUR( Date donation)

Date donation and analysis

Date donation

Data analysis( test of suppositions)

Reference

CHAPTER FIVE( Conclusion)

Chancing conclusions and recommendation

Summary

Conclusions

Recommendation

Bibliography

Chapter One

Introduction

Background Of The Study

The significance of the banking section in any frugality is deduced from its places of fiscal intermediation provision of an effective payment system and easing the implantation of financial programs. In intermediation, banks rally saving from the fat limits of the frugality and channel these finances to the deficiency units particularly private business enterprises for the purpose of expanding their productive capacity. In operating the payment medium, the banking systems arrears serve as the medium of exchange. In the prosecution of financial programs, bank serve as agents through which there programs are enforced. Hence, an effective and effective banking sector is essential not only for the creation of effective intermediation but also for the protection of depositors stimulant of healthy competition conservation of confidence in, and stability of the system and protection against methodical threat and collapse. For the banking in assiduity of any frugality to achieve there objective the assiduity must be stable safe and sound.

In Nigeria, there has been a rapid-fire increase in the number of bank failure and the magnitude of the problem has reached an unknown position.

presently, the problem has assumed a generalized dimension thereby making it an issue of concern to the government, the nonsupervisory authorities the bankers the general public and the transnational fiscal institutions similar as the world banks and transnational financial fund( IMF).

The purpose of this exploration work is to estimate the consequences of banks failure on the Nigerian frugality. Bank failure means different effects to different people.

To some people, a bank fails only when it ceases operation indeed if it has not been declared liquidated officially. In a wider bank which is unfit to meet its scores to its stakeholder as at when due arising form weakness in its fiscal functional and directorial conclusion which could has rendered it either illiquid and/ or by break( CBN/ NDIC, 1995)

The applicable stakeholder to a bank will include the depositors, the possessors of the bank and the frugality at large. From the foregoing, it’ll be clear that failed banks won’t only include the liquidated banks but also the problem banks that have displayed some form of weakness in their fiscal functional and directorial conditions which have rendered them either illiquid and/ or insolvent

Statement Of The Problem

In Nigeria, there has been a rapid-fire increase in the number of failed banks and the magnitude of the problem has reached an unknown position. Bank failures in Nigerian banking assiduity is a problem that has of late assumed an intractable dimension. The situation is similar that nonsupervisory authorities appear to be fighting a losing battle in their shot to sanitize the system. This has of course redounded in the corrosion of public confidence in the banking system and thus the reduction in the inflow of inventible coffers that could be conducted to the productive sectors of the frugality.

thus, that’s why the experimenter supposed it fit to examine the impact of there failed banks on Nigerian frugality.

Ideal Of The Study

Because of the central part which the banking system plays on the growth and development of any frugality the objects of this study are thus.

1. To find out if there’s loss of confidence in the banking system

2. To find out if there’s reduction in bank deposits

3. To identify if there’s any reduction in foreign investments.

4. To find out if bank failure can lead to devaluation of the Nigerian currency.

5. To find out if bank failure can lead to severance through retrenchment of workers.

Exploration Questions

The experimenter intends to make a critical and empirical evaluation fo the impact of failed banks on Nigerian frugality.

Towards this end applicable answers to the following exploration questions come necessary. 1. Is there loss of confidence in the banking system due to bank failure? 2. Is there any reduction in bank deposits due to bank failure? 3. Does bank failure lead to reduction in foreign investment? 4. To what extent can bank failure lead to devaluation of Nigerian currency? 5. Does bank failure lead to severance?

Exploration Suppositions

1. Ho Bank failure can not to caused by poor portfolio operation

Hi Bank failure can be caused by poor portfolio operation

2. Ho Government’s debts owed to banks can not lead to bank failure

Hi Government’s debts owed to banks can lead to bank failure

3. Ho Monetary authorities has no significant part to play in controlling

bank failure

Hi Monetary authorities have significant part to play in controlling

bank failure.

Compass Of The Study

This exploration work is limited to Nigeria frugality only. One to time, fiscal constraints and others, the experimenter was unfit to cover important ground.

Description Of Terms

1. Insolvent incapability of bank to meet the claims of its creditors as and when they fall due.

2. Stakeholders Defined as people who have invested some quantum of plutocrat in the bank.

3. Bank failure Defined and use then as the incapability of banks to meet its scores as and when due from weakness in its fiscal, functional and directorial conditions

4. Depositors Those who deposit plutocrat with the bank

5.C.B.N Defined as the Central Bank of Nigeria

6. NDIC Defined as Nigeria deposit insurance pot