This research work in failed banker is with a view to examine its impact one the Nigerian economy. The statement of problem in this research work aimed at finding if there are reductions in the flow of inventible resources that could be channeled to the productive sector of the economy.

Section II showed how the researcher made a random selection of 100 respondents 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 identifying the forms and causes of bank failure in Nigeria banks in section III; this section was what the researcher was able to do which other researcher failed to do.

Section IV the major finding was summed up in just one sentence which is “Bank failure has almost crippled Nigerian economy and this implies that bank failure retards the economy’s rate of capital formations and ultimately the face of economic growth concluding with section V the researcher suggests that further researcher should research on the role of monetary authorities in bank failure prevention. chapter One

1.0 Introduction

1.1 Research background

1.2 Problem

1.3 Purpose of the survey

1.4 Research question

1.5 Research hypothesis

1.6 Scope of investigation

1.7 Limitations of the study

1.8 Definitions


Chapter 2 (references)

2.0 Review of relevant literature

2.1 Definition of failed bank (due to bank failure)

2.2 A review of evolving bank structures and failure patterns

2.3 Scale of bank failures in Nigeria

2.4 Effects of bank failures on the Nigerian economy

2.5 Factors behind bank failures in Nigeria

2.6 Dealing with bank failures in Nigeria


Chapter 3 (Research methodology)

3.0 Survey design and methodology

3.1 Study design

3.2 Research fields

3.3 Population

3.4 Sampling and sampling procedures

3.5 Data collection tools

3.6 Data presentation method

3.7 Methods of data analysis


Chapter 4 (Date Display)

4.0 Date display and analysis

4.1 Date Representation

4.2 Data analysis (hypothesis test)


Chapter 5 (Conclusion)

find conclusions and recommendations

5.1 Summary

5.2 Conclusion

5.3 Recommendations


chapter One


1.1 Research background

The importance of the banking sector in any economy derives from its role as a financial intermediary, providing efficient payment systems and facilitating the implementation of monetary policy. As intermediaries, banks mobilize savings from the economy’s surplus margin and channel these funds to loss-making firms, especially private ones, to expand their production capacity. In the operation of payment mechanisms, the liabilities of the banking system act as a medium of exchange. In implementing monetary policy, banks act as the agents through which that policy is implemented. An efficient and effective banking sector therefore not only facilitates efficient intermediation, but also protects depositors, promotes healthy competition, maintains confidence and stability in the system, and reduces system risk and collapse. is also essential to prevent For the banks of an economy to achieve its goals, the industry must be stable, safe and sound.

In Nigeria, the number of bank failures has increased rapidly and the scale of the problem has reached unprecedented proportions.

The issue has now taken on a more general dimension and is of concern to governments, regulators, bankers, the general public and international financial institutions such as the World Bank and the International Monetary Fund (IMF).

The purpose of this study is to assess the impact of a bank failure on the Nigerian economy. Bank failure means different things to different people. For some people, banks only fail when they go bankrupt, even if liquidation has not been officially declared. Failure of the broader bank to meet its obligations to its stakeholders on a timely basis, which could result in weakened financial operations and results of operations leading to illiquidity and/or insolvency. (CBN/NDIC, 1995)

Banks’ relevant stakeholders include depositors, bank owners and the economy at large. Thus, failing banks include not only liquidated banks, but also problematic banks that are illiquid or insolvent due to some weakness in their financial management and operations. That is clear.

1.2 Problem Description

In Nigeria, the number of failed banks has risen rapidly and the scale of the problem has reached unprecedented proportions. Bank failures in the Nigerian banking industry are a problem that has taken on an insolvable dimension in recent times. The situation is one where regulators are fighting a losing battle trying to sanitize the system. Of course, this has led to a decline in public confidence in the banking system, resulting in a reduced flow of inventive resources that could be directed to the productive sector of the economy.

For this reason, the researchers found it suitable to study the impact of bank failures there on the Nigerian economy.

1.3 Purpose of the survey

Therefore, since the banking system plays a central role in economic growth and development, the purpose of this study is to:

1. Find out if trust in the banking system has been lost

2. To find out if bank deposits have been reduced

3. Determine if foreign investment is declining. 4. To find out if a bank failure could cause the Nigerian currency to depreciate.

5. To find out whether bank failures lead to unemployment by laying off workers.

1.4 Research question

Researchers will conduct a critical and empirical assessment of the impact of failed banks on the Nigerian economy. This requires good answers to the following research questions: 1. Will bank failures cause a loss of confidence in the banking system? 2. Will bank failures reduce bank deposits? 3. Will a bank failure lead to a decline in foreign investment? 4. How much could a bank failure depreciate the Nigerian currency? Will bank failures lead to unemployment?

1.5 Research hypothesis

1. Ho:
Poor Portfolio Management Does Not Cause Banks to Fail

Bank failures may be due to poor portfolio management

2. Ho:
Government debt to banks cannot cause bank failures

Government debt to banks could make banks fail

3. Ho:
Financial authorities play no major role in governance

bank failure

Financial authorities play an important role in control

bank failure. 1.6 Scope of investigation

This research work is limited to the Nigerian economy only. Due to time constraints, financial limitations, etc., the researchers were unable to cover much.

Definition of terms

1. Bankruptcy:
Failure of the bank to meet the creditor’s claim by the due date.

2. Stakeholders:
Defined as a person who has invested a certain amount


Leave a Comment