The Role Of Financial Institution In The Development Of Nigeria Economy

The Role Of Financial Institution In The Development Of Nigeria Economy

Chapter One

Preface

Background To The Study

A fiscal institution can be defined as any institution which portfolios of means correspond largely of claims rather than force, factory and outfit. fiscal institution serves as interposers in the fiscal requests.

still, since emphasis will be placed in banking sector as a fiscal institution. It’ll be proper at this point to make known what the banking sector entails and its part in the development of Nigerian frugality.

The banking assiduity is of tremendous applicability to the profitable development of any nation in the sense that it’s responsible for the allocation of finances to different sectors andsub-sectors of the entire frugality. These sectors include husbandry, manufacturing, mining, construction, transportation, tourism, to mention but a many. The profitable situation of Nigeria moment is of great concern to all and this led to the preface of different measures by the Federal Government to bail the frugality out of total collapse.

The preface of profitable measure similar as privatization of government parastatals, the Foreign Exchange Market, and also the fate of Naira is being determined by the forces of force and demand. And the structural adaptation programmed. All these conditioning are being involved by the banking assiduity for acceptable perpetration in order for the government to achieve its points on confining the country’s frugality.

The recent increase witnessed in the number of marketable and trafficker banks in the. country to satisfy the demand of the adding population on business backing and other fiscal related areas has needed a careful look at the conditioning of this assiduity, its applicability, with a view to explain its vital part to the profitable development of Nigeria.

Primarily, a bank is a fiscal institution where plutocrat and other valuables similar as gold, instrument, wills share instruments, to mention but a many, are kept for guardianship. In ultramodern day banking still, this function has been enlarged and obviously modified. Hence, present day banking would be modified as the art of keeping, swapping, advancing and adopting as well as an premonitory services for all which combine to make plutocrat available or finances and incontinently put to effective application.

Banks in this regard constitution most important points upon which the wheel of the frugality in general rotates. In the economically development countries similar as the United States, United Kingdom,

Canada, Banks perform similar fresh functions as setting and concurrence of diurnal credit purchase cards and night saving installations which are services not available in developing countries of Africa.

In Nigeria, there’s a remarkable increase in the function performed by our banks. This include acceptance of deposits regard holders, granting of loans and advances, foreign exchange, blinking bills of exchanges loan syndication, outfit leasing, effecting incorporating and accession of companies. Also banks offer fiscal advice to multitudinous guests.

Backing experimental systems, allocation of letter of credit to their client, acting as Trustees and Delegates and Agents in the buying and selling of Stock Exchange Securities on behalf of guests.

Purpose Of Study

These have been bruited that fiscal institutions aren’t helping the redoing of the frugality but are more interested in making gains, not only gains but large gains that are supposed to be plunged back in the frugality but are not.

The purpose of this study with special reference to the banking assiduity is thus to find out the places actually played by the banks on the present state of frugality i.e. to come to a conclusion as to whether these places are effectively developing the frugality.

compass OF STUDY

In view of the lesser part played by the fiscal institutions in executing government programs aims at developing the Nigerian frugality and in view of the fact that the banking sector touches every sector of the Nigerian frugality, it’s important to limit the study of the part played by the banking assiduity with a brief citation of the insurance assiduity, the Nigerian Stock Exchange and a many other fiscal institutions.

Limitation Of Study

In factual, no bone can bravely state or give the time picture of what future have for him but one can still do this to some extent grounded on one’s gests of the history, and the present condition. In the light of the below, the experimenter can state as follows the limitation likely to be encountered in carrying out this exploration

TIME CONSTRAINTS

To be specific, time can noway be enough since any exploration work is grounded on chancing out data in which all now changes are known. And most importantly, changes do nearly every day.

FINANCIAL CONSTRAINTS

This is yet another constraint in that to carry out any exploration, a lot of plutocrat is generally being spent- transportation, codifying, binding.

Geographical Content

The above mentioned constraints in tum affect geographical content of this work in that both are used in enforcing the latterly. also, some Nigerian frugality covers the whole country; there will be no time, plutocrat to cover all the geographical regions. In the light of the below, the exploration will be carried out in Lagos.

Literal Background Of Wema Bank Plc

Wema Bank PIc is a Commercial Banking Institution Incorporated in 1945 as a private Limited Liability fiscal institution under its old name, Agbonmagbe Bank Limited.

The bank with a modest morning now has over 154 branches at colorful major locales in Nigeria. It has also effective connection in the business centre of the world, allowing the bank to offer presto and effective banking services within and outside Nigeria. The bank functions are regulated by a general policy formulated, approved by the board that embodied functional, counting labor force, lending and expansion programs.

Recent time has seen tremendous growth in all sphere of its operations.

There has also been a phenomenal expansion in its clientele among who are statutory pots, agronomist, state and original governments, marketable houses, industrialist, on a sampling of the general public. The bank is presently directed by a vividly and Dynamic board in whose hands its future development lays.

Physical development and robotization of the bank, piecemeal from the bank’s purchase for strong and functional physical structure, the interplay of real aesthetic beauty and value depicts the oneness in the overall design of Wema Bank, Urban,Semi-Urban and Rural branches.

The bank’s branches at Apata, Tponri, Edun- Abon Mokola, Olubadan, Dopemu, Ondo Town and a host of others are just a many illustration of its oneness in architectural design.

At a time when Computer Technology is being introduce as a way of enhancing qualify and fats service in the banking assiduity. Wema Bank has in fact successfully computerized its Head Office Account and a lesser number its branches.

Details comprehensive plans are formerly a bottom computerized the many remaining branches.

This isn’t only in consonance with modem banking needs; it also underscores the desire to deliver their services with minimal detention in a fairly conducive terrain.

Also, a strategic business unit which is aimed at planning for the future of the bank as’ well as making it to stay round in the country’s present harsh frugality condition has been set up.

Wema Bank’s commercial ambition propelled by the ever intriguing need to consolidate as well as ameliorate as its achievements has led to the preface of numerous products enumerated below.

Financial Services

Overdraft

Short- term and medium- term loans

Bankers Acceptance/ Commercial Papers

Guarantees

Bills blinking

Performance services

Commercial Services

• Participation in loan syndication

• Trade finance

• Import finance

• outfit leasing

• Advance to commercial guests

Financial Advisory Services

• Business premonitory services are also handed free of charge to the guests of the banks.

International Financial Services

• unnoticeable trade sale( i.e. buying and selling of foreign currencies, particular home remittances).

• Visible track sale

• Import services.

design BUDGET

For any design to be successfully executed in which exploration is no impunity, a certain sum of plutocrat has to be allocated, fixed or calculated for it. Through it might not accurate but it’s good not to be surpass quantum calculated for. still, in carrying out this exploration, the quantum can be broken down as follows

Transportation

Typing

List

Data collection

eclectic

Problem Of Study

In depressed profitable as endured in Nigeria. The banks are hampered in carrying out their rates in revamping the profitable by a number of factors. One of their major difficulties is in connection with being loans and advance to the public sector which are long overdue.

The quantum as at the end of 1991 was put at N23.5 billion and was owed to the banks by colorful state government and their agencies.

N34.6 billion as at 2011. A substantial proportion of these debts arose out of credit to state government for the direct payment of stipend and other stipends to their workers and credit handed to the governments and their agencies for financing colorful design.

In addition to these direct lending to the government arid their agencies, the banks have also made huge lending to numerous contractors who had worked for the government and their agencies and who were yet to be paid for similar systems or other jobs performed. Although some advancements in the prepayment and saving of these overdue loans and advances have been made, what remains outstanding continues to determine the quantum of progress the banks could insure, made In sustaining the nation frugality by recovering lending into further productive areas. This capital request is still fading a lack of general public mindfulness about the securities business. The girdled by mysticism among the general public. This state of ignorance can be exploited by unconscionable individualities at the expenditure of the general public.

likewise, there’s a high disproportion between demand and force of securities as numerous indigenous businesses are adverse to public citation of their businesses substantially for fear of losing control.