This paper seeks to
examine the Role of Banking System in the development Nigerian economy with
reference to Nigerian Breweries Plc. The project work specifically looks at the
role and impacts of banking sector to the Manufacturing industries.
project reviewed various literature that relates to the major variables
involved in the research work especially economic theories and the banking
system, the Nigerian financial structure which is made up of the money market,
the bond market and the equity market, the literature also examined the role of
banking system to manufacturing industries and the economy of Nigeria and it
finally identified the challenges faced by the Nigerianbanking sector.
structured questionnaire was designed and administered to one hundred (100)
staff of Nigerian Breweries Plc. The data gathered were presented on table in
percentage. Three hypotheses where formulated, tested and analysed. These
hypotheses were tested with the used of Chi-Square (X2) analysis.
Decisions were made based on the result of the analysis.
the results of the analyses the following conclusions are drawn;
Nigeria Banking System plays significant role to
the growth of manufacturing industry and economic development of the Nigeria.
The Nigeria Banking policies promote development
of manufacturing industry in Nigeria.
Government and Central Bank of Nigeria Policy is
responsible for the ineffectiveness of the Banking Sector.
recommendations were suggested to the Banking sector and manufacturing
TABLE OF CONTENT
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Delimitation of the Study
1.8 Definition of Terms
2.2 Economic Theory and the Banking System
2.3 Financial Sector Depth. Liberalization and
2.4 Human Capital Formation and Financial
2.5 The Financial System Structure
2.5.1 The Money Market
2.5.2 The Bond Market
2.5.3 Equity Market
2.5.4 The Central Bank of Nigeria
2.6 The Role of Banking System to the Economic
Development of the Country
2.6.1 Banks Promote Capital Formation
2.6.2 Investment in New Enterprises
2.6.3 Promotion of Trade and Industry
2.6.4 Development of Agriculture
2.6.5 Balanced Development of Different Regions
2.6.6 Influencing Economic Activity
2.6.7 Implementation of Monetary Policy
2.6.8 Monetization of the Economy
2.6.9 Export Promotion Cells
The Risk Sharing Role of Banks
Banks and Contagion
The Corporate Government Role of Bank
2.7 Challenges Faced by the Banking Sector
2.7.1 Problem of Information Technology
2.7.2 Human Resources
2.7.3 High Rate of Fraud
2.7.4 Resources Mobilization
2.7.5 Inadequate Capital Structure
2.7.7 Non-Performance Risk Assets
2.8 Recommendations to the Challenges Faced by
3.1 Research Design
3.2 Population of the Study
3.3 Sample Size and Sampling Technique
3.4 Research Instrument
3.5 Validity of the Research Instrument
3.6 Reliability of the Research Instrument
3.7 Administration of Instrument
3.8 Method of Data Collection
3.9 Analysis of Data
PRESENTATION AND ANALYSIS
4.2 Personal Characteristics of the Respondent
4.3 Response of Respondents to the Problem
4.4 Testing and Interpretation of the
4.4.1 Test of Hypothesis One
4.4.2 Test of Hypothesis Two
4.4.3 Test of Hypothesis Three
CONCLUSION AND RECOMMENDATION
1.1 BACKGROUND OF THE SYUDY
the last three decades, the Nigerian Banking industry witnessed tremendous
changes, which has influenced the performance of the industry in terms of operational
strategies and standard of operations.
portion of the changes result from the promulgation of Banks and other Financial
Institution ACT (BOFIA) 1991 designed to regulate the operations of the
financial institutions as a whole which provided more lenient terms for
establishing banking and other financial institutions in the 1958 banking
ordinance. As a result of the terms, number of banks starts to increase and
many more investors trooped into the industry owing to the liberalization of
conditions for establishing banks provided by the new decree.
by Adekanye (1998), the increase in the number of financial institutions led to
serious competition in the banking industry, which gradually phased out the era
of “Armchair Banking Industry” in the country.
(1997) observed that due to the growing level of competition and the rapid pace
of development in the Nigerian banking industry, the apex bank must assist
these banks to become more competitive as a way of increasing their strategic
planning activities in a way that will provide them with a comparative
advantages over others and render qualitative service at a low competitive
(1997) in the same vein as Soladoye, in his book “Bank Strategies Management
and Marketing” opined that there is a need to keep the existing customers of
the bank, which should be done by satisfying their needs through the widening
of the variety of services and the expansion of the market by diversifying to
attract new customers.
the performance of a bank depends largely on the amount of transactions it
carries out within a year which subsequently depend on the market share of the
bank apart from the growing need for the introduction of the universal banking
in the Nigerian banking industry, prompted the CBN to approve the adoption of
universal banking in the Nigerian banking industry.
guidelines specified the rules and regulation on qualified banks and the type
of business they could perform were issued by the banking supervisor Mr. O.I
Imala, the CBN’s director, under the guidelines, specific activities such as
clearing house functions, capital market activities as well as insurance
functions can be performed by qualified banks in addition to their conventional
functions.However, this research project has been designed to examine the role
of banking system in the development of Nigeria economy with emphasis on the
manufacturing sector of the economy.
OF THE PROBLEM
in a research, there are problems that the research work tends to find solution
to. In this study, the problems are state below:
business was stagnant and under developed because bank managers were less
innovative and concentrated mostly on the selling concepts shying away from the
most important tenet banking operations, which is the marketing concept.
problem generated between managers in the corporate headquarters and managers
in the business units (branches). It arises when the owner in an organization
and the agent who must performs certain actions is to implement the plans drawn
up by the owners.The competitive environment of the 1980’s and 1990’s is
forcing the re-appraisal of this position and the complete phase out of the
“era of Arm Chair Banking” brought about increasing level of competition in the
banking industry which created a new wave of development in the industry.
emphases were thus shifted to the diversification of banking services and the
need to make marketing strategic planning an indispensable element in banks
corporate policies.If productivity must be felt, then such banks should build
the required competence and stretch these competencies ahead of times. Leadership
cannot be compromised as proved by the failure of banks in the west, size is not
a strength, as no bank is too big to fail
of this study is to examine the role of banking system in development of the
economy. However, other specific objectives include:
examine how banks are affected by public ownership and policies of financial
identify the causes of the financial distress in the banking industry and the
efficacy of the financial reforms.
To examine the impact of banking system to
To examine the specific qualifying conditions
specified by the apex banks to qualified participating banks.
To evaluate the level of competition among banks
and compliances with the apex bank.
To evaluate the effectiveness of Nigeria banking
To examine the impact of banking system to the
In order to achieve the purpose
of this research study, the study will attempt to provide answers to the
following research questions.
Has Banking System of Nigeria impacted on the
economy of the country?
How is the economy of the country manifested and
realized in its banking sector?
How can Nigeria's banking sector contribute to
its economic growth given the fact that economic development issues and
constraints may occur along the way?
What are several policies that Nigeria banking
system must adopt and execute in achieving successful economic growth?
Does Nigeria banking system promote long- run
Does Nigeria economy provide important services
for bank sector growth?
Does Nigeria Banking System play any significant
role to the growth of manufacturing industry and economic development of the Nigeria.
1.5 RESEARCH HYPOTHESES
is a tentative answer to a research question. It is a conjectural statement
about the relationship that exist between two or more variables which needs to
be tested empirically before they can be accepted or rejected. To provide
answer to the research questions arising from this study, the following
hypotheses are postulated.
Ho: Nigeria Banking System does not play any significant
role to thegrowth of manufacturing industry and economic development of the
H1: Nigeria Banking System plays significant
role to the growth of manufacturing industry and economic development of the
Ho: The Nigeria
Banking policies does not promote development of manufacturing industry in Nigeria.
H1: The Nigeria Banking policies promote
development of manufacturing industry in Nigeria.
Ho: Government and Central Bank of Nigeria
Policy is not responsible for the ineffectiveness of the Banking Sector.
H1: Government and Central Bank of Nigeria
Policy is responsible for the ineffectiveness of the Banking Sector.
OF THE STUDY
of the research project is to identify the role of banking system to
development of manufacturing industries.
study also is expected to supply the relationship between the necessary
requisite features to be put in place by banks and the efficiency and
effectiveness of banking system to an organization like Nigerian Breweries Plc.
OF THE STUDY
research work is to examine the role of backing system to the development of
the economy. The scope of the study is the entire banking sector to the
development of manufacturing industries and the Nigeria economy in large, but
due to the broad scope of the this research, the researcher is limiting the
study to Nigerian Breweries Plc as representative of the entire manufacturing industry.
course of conducting this research work it is expected that the following will
constitute impediments to the effective conduct of the study
a) Time constraint within which the study
must be completed.
b) Financial constraint
c) Inaccessible and inadequate data
combining project work with several other activities is another stressful task
that may not allow me to cover research materials extensively.
I believe the above limitations will in no way affect the reliability and
validity of the research study.
BANKING SYSTEM:a network of commercial, savings, and specialized banks that
provide financial services, including accepting deposits and providing loans
and credit, money transmission, and investment facilities
situation in which a faltering economy in one country causes
otherwise healthy economies in
other countries to
financial system and trading of currencies among banks and financial
institutions, excluding retail investors and smaller trading parties
GLOBAL ECONOMY: The
international spread of capitalism,
especially in recent decades, across national boundaries and with minimal
restrictions by governments.
FINANCIAL INSTITUTIONS: An organization, which may be either for-profit or non-profit, that takes money from clients and places it in any of a variety of investment vehicles for the benefit of both the client and the organization
removal or reduction of restrictions or barriers on the free exchange of goods
BANK: A financial institution that provides services such as
accepting deposits and giving business loans.
CAPITAL: The set of skills which
acquires on the job, through training and experience, and
which increase theemployee'svalue in the
MARKET: A segment of the financial market in which
financial instruments with high liquidity and very short maturities are traded
MARKET: The environment in which the issuance and
trading of debt securities occurs
EQUITY MARKET: The
market in which shares are issued and traded, either through exchanges or over-the-counter
BANKING: A banking philosophy that aims to establish long-term
relationships with customers and reduce the customer's desire to go elsewhere
for banking services.