1.1 BACKGROUND OF
is universally acknowledged that the banking including play a catalytic role in
t he process of economic growth and development. This acknowledgement is reinforced by
contemporary conceptualism to the effect that banks are a veritable vehicle for
mobilizing resources from su7plus units and tempting same to deficit unit.
Banks constitute perhaps the most important segment of the financial market and
played and a dominate vote in not mobilizing savings, but also allocating them
for investment purposes.
domestic savings rate is relatively low compared to most other developing counties
with the same for capital income level. In the past, investment rates were high
and hence there was no problem for raising funds.
present economic dispensation, the companions or the drive for savings deposit
has been stepped up by banks and non- bank financial institutions. It is Hoover not sufficient
because the range and type of financial assets available are equally important.
There is a wide range of saving instruments offered banks and non – bank
financial institutions in Nigeria
of the voluntary and non – contractual financial savings consist of savings and
time deposit. Although other types of deposit such as savings certificate,
premium savings bonds play any a miner rate, banks and non – bank (Moncial Institutions
are today competing strongly among them instruments including additional frame
benefits almost banks are now offering
contractual forms of savings aimed at persuading depositors to invest in long
some banks are foreseeing to mobilize funds today is the montage saving:
because large number of Nigerians need accommodation of their own but fund it difficult
with their meager income. Interest payment a demand deposits accounts has also
some positive impact on the propensity to save. Bank have also been allowed by
the government to open domaliary account
for Nigerian exporters in which proceed of experts can be paid or saved until
when they are needed. Transaction costs
related to operating a new accounts and making deposits and withdrawals are now
be coming relatively easier particularly for small savers. There is also the
pension scheme which seeks to induce depositors to invest small sums of money
over a specified period of time in the hope of receiving a stream of benefits
upon reacting the age of retirement.
crisis of confidence in our banks is a great set bank for the banking
system. In the past the majority of
those who patronized the banks did so in order to find safer place for their
money. And for many years bank in the country were the character of currency
store house. But because of the lack of confidence in banks today s sizeable
amount of Nigerians keep their currency or cash at home and this marks of most
of cash unpaired by the banks. According to withstanding et al (1996:133), this
one depositors resulting to cash drains. In the broadcast sense a cash drain
refers to any kind of cash loss suffered by a bank.
the financial intermediaries function of intermediation. Most of our industries
depend on commercial bank assistance in form of overdraft short term and long
loans for effective operation.
1.2 STATEMENT OF PROBLEM
Income posses the greatest constraint to
savings mobilization. The generally low level of income among the people in Nigeria is a
limiting factor to savings mobilization. The inadequate banking facilities in
the economy in general and the rural areas in particular also constitute on
obstacle to wide savings mobilization.
Growing frequency of incidences of
found, insider abuses and malpractice which all combine in on unholy alliance
to erode public confidence in financial institutions and do painful damage to whatever level of banking habit has
Another factor that may affect savings
mobilization is the absence of affective a realistic interest rate policy that
rewards savers with adequate return on their savings. It is argued that in as mush as the rate of
interested adjusted for inflation various negative. Savings are likely to
remain low. Perhaps the greatest problem in this country is that we run a cash
economy. The handers the financial intermediaries from performing their
functions. The practice constrains banning systems ability to mobilize funds
with the consequence that banks create small mount of deposit in comparison to amount demanded as
loan by the economy.
OF ITS STUDY
The aim of the study is to examine
available ways of achieving greater mobilization of savings and its efficient
and effective channeling for economic growth the research aims at .
for improving greater mobilization of domestic resources in our bank.
Identifying the means
throughout which the mobilized funds can effectively which the channeled to the
growth and development of economy.
Identifying the effect
of interest rate mobilization of domestic savings.
Identifying the effect
of bank distress in deposit acquisition.
effects of income earned to savings mobilization.
Has there been an
improvement measure towards achieving greater dogmatic resources in our bank?
Does the mobilization
of domestic savings contribute in the economic growth of the economy?
Does the interest rate
charges on the mobilization of domestic savings positive?
Does the bank distress syndrome
have any significant effect to the deposit acquisition?
Does the propensity to
save income earned have effect on the mobilized savings of the bank?
To determine the
validity and volubility of the information gathered the following hypothesis
(1) H0: There
has been no improvement measure towards
achieving greater domestic resources in our bank
There has been improvement measures
towards achieving greater domestic resources in our bank .
(2) H0: The
mobilization of domestic saving and development of the economy.
of domestic savings does contribute in the growth and development of the
(3) H0: The
interest rate has no positive effect to the mobilization of Domestic savings.
interest rate has a positive effect to the mobilization of domestic savings.
4. H0: The
bank distress has no significant effect to the deposit acquisition.
H1: The bank distress has significant effect to the deposit acquisition.
5. H0: There
is no significant relationship between income earned of the people and the
mobilization of domestic savings by the bank.
is significant relationship between income earned of the people and the
mobilization of domestic savings by the bank.
(6) H0: There
is no significant relationship between the mobilization of domestic savings and
is a significant relationship between the mobilization of domestic savings and
OF THE STUDY
intends to elicit body of knowledge and understanding of the problem of
mobilizing domestic savings by banks. It is expected. That of the
recommendations of this research are implemented it will help to change the
banking habits of people. It will also help the managers and staff of banking
industry in Nigeria
to improve on their fund mobilization strategy.
Researchers / students, lectures and
the generated public will also fund the findings and recommendations of their
research of value various interest areas, especially those who may wish to
carry out further study on the topic in any other relate filed.
LIMITATION AND DELIMITATIONS
examines the mobilization of domestic savings for economic growth and
development. The study covers on the need for mobilizing domestic savings, the
strategies employed by banks in mobilizing these savings and the problems
associated with the mobilization. It also takes a general view on the ways of
improving greater mobilization of domestic resources by the bank which all in
turn enhances economic growth.
The researcher broadly examines the
research topic as a whole and then
narrowed it down on the effort of the union bank of Nigeria PLC in mobilizing
these domestic funds certain constraints were encounter by the researcher
during this study they include :-
- Time was a major constraint,
bearing in mind that the work had to be handled done side other academic
responsibilities of the researcher and coupled with the short time required to
submit this work due to a very short semester.
FINANCE : This was another factor as the researcher
funds the cost of gathered and analyzing information (both primary and
secondary, costs of typesetting, photocopying materials and binding and other
expenses necessary for the effective completion of this work to be too exorbitant.
SAVINGS: This is that
part of income that is not consumed immediately but deferred for investment or
DOMESTIC SAVINGS: This consist savings from the citizens of the
country and not from foreigners.
Bank of Nigeria
the apex financial institution in the country.
INDUSTRY: This countries of the banking
institutions in the country which include the commercial banks, Merchant banks,
development banks etc. with the control Bank at the Apex.
UNION BANK OF NIGERIA
PLC: This is of the leading banks in the
country both by deposit and assets wish 283 branches touching.
BANKER: A banker could be send to be one who works in
on institution licensed to carry on the business of banking.
DEPOSITORS: These are bank customers who keep money or value with the bank on contractual terms.
bank may be classified distress when it
is unable to meet the bank examination
BOFID: Banks and other financial institutions Decree.
RURAL BANKING : This involves the establishment of banks in
rural areas to cultivate banking habit among the rural dwellers.