The Impact Of Finance Lease On The Performance Of Nigerian Banks

The Impact Of Finance Lease On The Performance Of Nigerian Banks

Abstract

The issue of shy capital remains one of the major challenges of business entrepreneurs in Nigeria. Business enterprises are constantly searching for ways to expand their operations and deliver quality services and increase profit, while the new bones want to start in good shape but enough backing isn’t readily available. Leasing has been long established as a creative backing tool for the accession of capital means. Over the times, leasing has grown into an assiduity of assessing compass, and lesser capabilities are met through this unique form of backing.

This study examines the impact of finance leasing on the performance of Nigerian banks.

The population of the study consists of twenty( 20) banks that are quoted on the Nigerian stock exchange and members of ÉLAN as at 31st December, 2005. The sample of the study is five( 5) banks drawn aimlessly from the population of the study.

The study uses direct retrogression as a tool of analysis to assess the impact of parcel backing on profitability, investment and shareholders fund of the named banks.

The study establishes that finance parcel has no significant impact on the performance of Nigerian banks despite the relationship between them is positive.

The study concludes that finance parcel has no significant impact on the performance of Nigerian banks and thus, recommends among others that Nigerian banks should increase their commitments into leasing business to ameliorate earnings from the proceeds of leasing and be leasing structures and office outfit rather of structure and buying them at the event of expanding or opening new branch.

Chapter One

Preface

Background to the Study

One of the most prominent issues in the commercial and fiscal world moment is the issue of leasing( Abashiya, 2005). In the developed countries, it’s nearly an integral part of the overall fiscal system and frequently supported as the least precious and utmost profitable form of backing( Afzal, 2003). As( Olusoga, 2003) indicates, the most generally accepted system of backing capital investment throughout the world is outfit parcel backing option.

In Nigeria, although parcel volume remains fairly insignificant in terms of world rankings, the conception is fast gaining recognition and has been impacting some major opinions in the colorful sectors of the frugality. With the deficit of capital in the mainland, numerous African countries similar as South Africa, Zimbabwe, Ghana, Nigeria and lately Egypt have used leasing as a major anchor of their profitable development policy with considerable success. In these countries, letters are completely involved in investments in the extractives diligence, transport, husbandry, construction and telecommunications( Olakunle, 2002).