Background of the Study
A pandemic is a disease outbreak that affects multiple countries or continents at the same time. It affects more people and kills more people than an epidemic, which the World Health Organization (WHO) labeled a pandemic when it became obvious that the illness was severe and spreading rapidly across a large area.
The unexpected and rapid emergence of the Coronavirus pandemic (Covid-19) in late 2019 and early 2020 left countries throughout the world befuddled. In 2020, Nigeria will join the majority of countries around the world in experiencing a health epidemic. Economic pandemics are a common occurrence in Nigeria, but she had never experienced a health pandemic.
The World Health Organization (WHO) classified the Covid-19 a Public Health Emergency of International Concern on January 30, 2020. (PHEIC). The Federal Ministry of Health confirmed the first incidence of Coronavirus disease in Lagos State, Nigeria, on February 27, 2020. In the same email, the Minister of Health revealed that the Nigeria Center for Disease Control (NCDC)-led Multi-sectoral Coronavirus Preparedness Group has activated its National Emergency Operations Center.
The Coronviridae family is divided into two subfamilies: Torovirinae and Coronavirinae. Coronavirinae is divided into four subgroups: alpha, beta, gamma, and delta. The taxonomy of these virus subtypes is based on phylogenetic grouping. Governments implemented mitigation techniques based on social distance, national quarantines, and the closure of non-essential companies to slow the spread of the new COVID-19. The economic slowdown hit the corporate sector hard, forcing it to scrabble for funds to pay operating costs as a result of the revenue shortage. The financial sector, particularly banks, is expected to play a critical role in absorbing the shock by providing much-needed funding (Acharya & Steffen, 2020; Borio, 2020). Central banks and governments undertook a wide range of policy actions in response to these unprecedented conditions. While some measures aimed to mitigate the short-term tightening of financial conditions, others aimed to support the flow of credit to businesses, either through direct intervention in credit markets (e.g., government-sponsored credit lines and liability guarantees) or by loosening bank capital buffer restrictions. While credit institutions are being relied upon to play a critical countercyclical role in supporting the real economy, these activities have a number of repercussions for the banking sector’s future resilience. For example, when lenders deplete their existing buffers, asset quality may deteriorate, posing a threat to the system’s stability.
STATEMENT OF THE PROBLEM
The covid-19 epidemic has thrown the world into extremely challenging and largely unknown waters. Banks, like their consumers, workers, and the society they serve, are feeling the strains. Nonetheless, maintaining crucial Banking services while safeguarding the health and well-being of your employees is a critical obligation. Meeting changing needs will require digital capabilities and efficient resource allocation. Low patronage, inadequate liquidity and returns, employee reductions, and client loss were all scenarios that the banking industry faced. However, in view of the widespread effect of covid-19, bank directors and stakeholders must guarantee that suitable policies are put in place to address the matter.
OBJECTIVE OF THE STUDY
The study’s main goal is divided into three categories:
To investigate the impact of Covid-19 on Nigeria’s financial system.
To investigate the influence of monetary supervisory agencies’ actions during the pandemic.
To measure the level of compliance among banking sector employees and clients during a pandemic
To investigate the issues that the banking sector is likely to face even after Covid-19.
SIGNIFICANCE OF THE STUDY
The impact of Covid-19 on the banking sector will be investigated in this study. What it is obligated to do in this delicate position. It would need bank executives and stakeholders to go back to the drawing board in order to devise workable solutions to prevent things from getting worse. It will inform the government and key policymakers on the procedures and policies that should be implemented to save the banking sector from these disastrous consequences.
Is there any impact of Covid-19 on the banking system?
What monetary policies and initiatives did the government undertake in the banking sector in Covid-19?
To what extent did banking personnel comply with COVID-19 safety measures and monetary policies on behalf of their customers?
What obstacles is the banking industry expected to confront even after COVID-19?
In this investigation, the following hypotheses will be tested:
H0: Covid-19 has no significant impact on the financial sector.
H1: Covid-19 has a huge impact on the banking sector.
SCOPE OF THE STUDY
The goal of this study is to investigate the impact of Covid-19 on the Nigerian financial sector, utilizing Access Bank Nigeria Plc, Lagos as a case study.
LIMITATIONS OF THE STUDY
Several problems were faced over the course of the research, including but not limited to the following. These are the ones.
Inadequate funding: The research was hampered by a lack of funds, which prevented the researcher from accessing banks in Lagos, as well as printing and collating questionnaires.
Time: Another constraint is time, as this research had to be completed while also juggling other academic responsibilities, making it impossible to conduct this study in a large, representative sample.
An effect is a change, reaction, or impression that is caused by or is the result of something, according to Collins dictionary.
COVID-19: Coronavirus disease 2019 (COVID-19) is an illness caused by a novel coronavirus known as severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2; formerly known as 2019-nCoV), which was first identified in Wuhan City, Hubei Province, China, during an outbreak of respiratory illness cases.
The banking sector is an industry and a segment of the economy dedicated to holding financial assets for others and investing those financial assets in a leveraged fashion to create more wealth.