The Impact of the Nigerian Economy on the Banking Sector
CHAPTER ONE
OBJECTIVE OF THE STUDY
The objectives of the study are;
- To ascertain the impact of Nigerian economy on the banking sector
- To ascertain the role of banking sector in the Nigeria economy
- To ascertain the relationship between Nigeria economy and banking sector
CHAPTER TWO
REVIEW OF RELATED LITERATURE
THEORETICAL FRAMEWORK
In recent times, it has been proved that financial development plays a significant role in economic growth and development. Meier and Seers (1984) observed this development, by asserting that “the pioneers of development economics” have totally excluded the discussion of financial development in the growth process. Schumpeter (1911) argued that a well-functioning financial system will spur technological innovations through the efficiency of resource allocation from unproductive sector to productive sector. Conversely, Robison (1952) argues that the kind of relationship that exists between finance and growth is growth-led. All the same, McKinnon (1973), Shaw (1973) and Goldsmith’s (1969) have all favoured financial development as a relevant means of economic growth and development in their work. Growth and development depend on the efficient use of the capital stock, and financial institution performs the allocation function. The sector strategically provides all that is needed towards the attainment of efficient financial resource allocation for onward optimum outputs and productivity (Greenwood & Jovanovic, 1990; Bencivenga & Smith, 1991; Boyd & Smith, 1997; Levine, 1997). Some growth theories made it clear that main feeder of outputs comes from the financial sector, because it is the sector that mobilises savings from wherever it is, and deploy it to production process (Solow, 1956; Romer, 1996; Todaro & Smith, 2011). If the sector is weak, no doubt, productivity and outputs will surely be weak. As a point of emphasis, Schumpeter’s position about the financial development has been the situation in the developing countries of the world. Conclusively, from Solow model, the accumulation of physical capital cannot account for either the vast growth over time in output per person or the vast geographic differences in output per person (Romer, 1996). Specifically, the mechanism through which capital accumulation affects output is through a conventional channel that capital makes a direct contribution to production (Romer, 1996). From the immediate equation above, which is the key equation of the Solow model. It implies that the rate of change of the capital stock per unit of effective labour is the difference between two terms (Romer, 1996).
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to the impact of the Nigerian Economy on the banking sector
Sources of data collection
Data were collected from two main sources namely:
Primary source and Secondary source
Primary source:
These are materials of statistical investigation which were collected by the research for a particular purpose. They can be obtained through a survey, observation questionnaire or as experiment; the researcher has adopted the questionnaire method for this study.
Secondary source:
These are data from textbook Journal handset etc. they arise as byproducts of the same other purposes. Example administration, various other unpublished works and write ups were also used.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was the impact of the Nigerian economy on the banking sector. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of the impact of the Nigerian economy on the banking sector.
Summary
This study was on the impact of the Nigerian economy on the banking sector. Three objectives were raised which included: To ascertain the impact of Nigerian economy on the banking sector, to ascertain the role of banking sector in the Nigeria economy, to ascertain the relationship between Nigeria economy and banking sector. In line with these objectives, two research hypotheses were formulated and two null hypotheses were posited. The total population for the study is 200 staff of UBA, Lagos state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. A total of 133 respondents made managers, accountants, customer care officers and marketers were used for the study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
However, from the study, the sector has experienced a remarkable growth rate since the introduction of structural adjustment Programme. This growth has not actually led to improvement in the performance of the Nigerian Economy. From the study, it was discovered that despite the recent series of reforms in Nigerian Financial Sector is yet to contribute significantly to the performance of Nigerian Economy. The sector is still faced with several challenges. This implies that a radical policies are required that will increase credit to private sector and ensure efficient allocation of credit to the private sector. Also, the apex bank (CBN) should be more committed to policy implementation.
Recommendation
- Banks should be encouraged to lend more to the productive sector (real sector) if their impact on economic growth is to be felt.
- Further study is also recommended on interest rate margins and their contribution to overall profitability. It is also essential to obtain the relevant data for more countries as to make the necessary cross-country comparisons. This should also prove fruitful in answering any unaddressed questions.
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