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This study focuses on finding out the extent to which development
banking has aided in development of the Nigeria Economy through financing and
granting of medium and long term loans for capital projects and other related
services like providing technical services to their bank customers who engage in
promotional activities to stimulate interest on new projects.
The study adopted a his historical method of investigation because of the absence of the questionnaire and the nature of the research only historical
research was designed since staff and management of development banking
carry out the same functions and the same business activities. The staff and
management of development banking constitute the population interest of 40 from
this population, a formular sampling method was use to arrive at a sample of B6
specifically, the objectives of the study are to among others.
To find out the role played by development banking in the development of
Agriculture, commerce an industrial sectors.
To highlight the impact of development banking in the Nigeria in the
To examine the extent of mobilization of funds to finance capital projects.
To examine the sources of funds to the development banking in Nigeria
To determine whether there is any difference in functions of banks that
make up development banking.
To accomplish these objectives data were collected historically, which
involved the sourcing of data from primary and secondary from the past and
present records and functions from the staff of different kinds of development
banking in Nigeria, published materials and textbooks.
The findings of the research work was based on the data on the literature in
Against this, background, both short and long term measures were
adopted and recommended in chapter five, and if implemented will go a long way
in boosting the development of development banking in this country to carry out
their business activities efficiently and effectively.
TABLE OF CONTENTS
Table of contents
1.1 background of the study
1.2 Statement of problem
1.3 Objectives of the study
1.4 Research questions
1.5 Significance of the study
1.6 Scope and limitation of study
1.7 Definition of terms
2.0 Review of related literature
2.1 The Nigerian industrial development bank (NIDB)
2.1.1 The Nigerian industrial development bank NIDB sources of fund
2.1.2 Functions of Nigerian industrial development bank
2.1.3 The re-construction of the Nigeria industrial development bank limited.
2.2 Mandate of bank of industry (BOI)
2.2.1 The objectives of bank of industry (BOI)
2.2.2 Sources of funds for bank of industry
2.3 Project selection criteria of bank of industry (BOI)
2.4 The Nigeria bank for commerce and industry (NCBI)
2.4.1 Functions of bank for commerce and industry (NCBI)
2.5 The Nigerian agriculture and co-operative bank (NACB)
2.6 Nigerian agricultural co-operative and rural development bank limited
2.7 Main obligations of Nigerian agricultura, co-operative and rural
development bank (NACRDB)
2.7.1 Ownership and sources of fund for NACRDB
2.7.2 Functions of Nigerian agricultural co-operative and rural development bank
2.7.3 Nigerian agricultural, co-operative and rural development bank (NACRDB)
special project loans
2.7.4 ECOWAS fund accelerated fish production project
2.7.5 International found for agricultural development project (IFAD)
2.7.6 Livestock development project (LDP)
2.7.7 Annual traction and hand tools technology programme
2.7.8 Types of loans granted by and rural development bank (NACRDB)
2.8 Role of development banking serves to economy
2.9 Defenses in mandate between bank of industry and Nigerian agricultural
co-operative and rural development bank (NACRDB)
RESEARCH DISGN AND METHODOLOGY
3.1 Research design
3.2 Sources of data collection
3.2.1 Secondary data sources
3.2.2 Primary data sources
3.3 Location of data
3.4 Population of the study
3.5 Sample size determination
5.1 Summary and conclusion
1.1 BACKGROUND OF THE STUDY
Development banking in Nigeria was established, as a result of strong
needs to close the gap created by the inability of the operating banks in Nigeria
such as commercial banks, central bank and merchant banks to provide the
needed funds to finance some special sectors of the economy such sectors which
must be financed mainly with long-term and sometimes with medium term funds,
need finance from specialized banks such as development banks. These banks
were established for the purpose of providing medium and long term loans for
capital projects in Agriculture commerce, industry and other essential projects that
are necessary for economic development of the country, such loans are usually
provided from the banks internally resources. For projects that require huge
capital resources than it can provided alone, development bank usually mobilizes
other financial institutions to raise the required loan for the establishment that
Apart from providing medium and long term loans for capital projects in
specific areas as already mentioned, development banks render ancillary services
like proving technical advice on new and existing projects to their customers,
engaging in promotional activities to stimulate interests among their customers on
new prefects which the banks consider necessary and profitable.
The commercial banks in operation provided short term funds which was as a result of the nature of funds available to them. Occasionally the provided
medium term funds and long-term basis. Development banks perform this function
by providing long-term loans for capital projects in specific areas. In Nigeria, we
have the Nigerian industrial development bank (NIDB), the Nigerian bank for
commerce and industry (NBCI) and the Nigerian Agricultural co-operative bank
(NACB) now known as Nigerian Agricultural, co-operative and rural development
bank limited (NACRD). These banks are owned by the federal government.
Following the reconstruction of the Nigeria industrial development bank
limited, NIDB in 2001, which incorporated the mandate of the Nigerian bank of
commerce and industry (NBCI), the (NBCI) apperar to have lost its identify. Today
you may not discuss the NBCI without seeing it as a part of NIDB.
Nevertheless, since NBCI, is still in existence having not be swallowed by
The NBCI was established through decree 22 of 5
th may 1973 by the
federal government of Nigeria. The bank which is believe to be a child of
circumstance because it came up after the Nigeria civil was when the indigestion
decree was set up. It started its operation on 4
th October, 1974.
The bank’s authorized capital at inception was N50 million N35 million of
this fully paid up and subscribed by the federal government with 60% and the
central bank of Nigeria, which had the remaining 40.
The bank when established was meant to assist the implementation of
the indigensation decree of 1972
By the decree No22 of 2
nd April 1973, the bank was to provide equity
capitates and funds by way of loans to indigenous persons, institutions and
organizations for medium and long term investments in industry and commerce at
such rates and upon board in accordance with the policy directed by the federal
This decree empowered the bank to borrow monies from any source it
can, to enable it meet its obligations and discharge functions.
1.2 STATEMENT OF PROBLEM
Following the increase economic activities in Nigeria, commercial banks
which have been established to provide their customers with short term loans can
no longer meet up with duties of providing medium. At this point in time the
monetary authority and the federal government saw the need to create a bank that
will cater for the need of people living in rural and urban areas and those who
want to invest on capital projects.
The aim of establishing this bank was to grant medium and long term
loans to Nigeria investors. The aim or establishing this bank was defeated due to
culminated by the economic depression pampging the Nigeria economy which had
lead to the Nigeria economy which had lead to the folding up or wounding up of
many industries which had slowed-down the business activates in our industries
which affect the development banking in Nigeria.
Development banking have not performed satisfactorily area of capital
projects and promotional activities to stimulate interests among their customers on
new projects which the bank consider necessary and profitable. This can be
attributed to in equate capital base, the high rate of interest charged on loans
borrowed and high cost of building houses. New initiatives are therefore needed to
tackle these problems.
1.3 OBJECTIVES OF THE STUDY
The objectives of this study are as follows:
1. To final out the role played by development banking in the development
of Agriculture, commerce and industrial sectors.
2. To highlight the impact of development banking in the Nigeria
3. To examine the extent of mobilization of funds to finance capital
4. To examine the sources of funds to the development banking in
5. To determine whether there is any difference in functions of bank that
makeup development banking.
6. Finally to make general and specific recommendations for worthwhile
for development banking in Nigeria.
1.4 RESEARCH QUESTIONS
The following research questions have been formulated for the study
1. What is the role played by development banking in the development of
Agriculture, commerce and industrial sectors?
2. What are the impact of development banking in the Nigeria economy.
3. What is the extent of mobilization of funds to finance capital projects?
4. What are the source of funds to development banking in Nigeria.
5. What are the difference in functions in banks that make-up
1.5 SIGNIFICANCE OF THE STUDY
The results of the study will be beneficial to different people in different
ways. It will be beneficial to stakeholders in development banking industry,
management and staff of the development-banking sector where achievement has
The study will benefit the public who will understand the role played by
development banking and use to apply for micro credit loans. It will be equally
beneficiary to investors who applied for medium and long-term loan on how
development banking finance capital projects. It will also stimulate new thoughts
and ideas on how development banking in Nigeria carry out its activities.
Finally, the study forms the basis upon which further research can be
1.6 SCOPE AND LIMITATION OF THE STUDY
The study was limited to development banking in Nigeria. Because of the
time frame and finance constraint on the side of the researcher, the scope of the
study was limited to developing banking in Enugu metropolis, Enugu State.
However, the researcher encountered problem in area of gathering
materials/data for the research work due to dearth of research materials on the
topic. This however, does not distort the researcher from getting relevant
documents that aided her in carrying out research work of this nature.
1.7 DEFINITION OF TERMS
RESUSCITATE AILING INDUSTRIES: This bank resuscitating ailing industries
that can operate competitively in the country’s economy.
LOCAL SOURCES OF FUNDS: This are funds provided to the development bank
by the federal government of Nigeria and the central bank of Nigeria.
INTERNATIONAL SOURCES OF FUNDS: This is a way by which development
bank obtain foreign loans and grants from international agencies.
ABSORPTION OF EXCHANGE RISK: The bank provides facilities that will
encourage the absorption of exchange risk encountered by funds users in respect
of foreign dominated loans.
Nwakoby: C.N (2004), “Banking practice and operations
in Nigeria; principles issues and practice, Emene-Enugu,
New Generation Books Publishing Company ltd, p 119.
Okeke, C.C.S (1990), “Senior Secondary Economics,
Onitsha, Jet Publishing Company.
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