DEVELOPMENT BANKING IN NIGERIA



ABSTRACT

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

Nigerian Economy.

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

chapter two.

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

Title page

Certification

Dedication

Acknowledgement

Abstract

Table of contents

CHAPTER ONE

1.0 Introduction

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

CHAPTER TWO

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

(NACPDB)

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

(NACRDB)

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)

References

CHAPTER THREE

RESEARCH DISGN AND METHODOLOGY

3.0 Introduction

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

CHAPTER FOUR

4.1 Findings

CHAPTER FIVE

5.1 Summary and conclusion

5.2 Recommendations

Bibliography

 

    CHAPTER ONE

1.0 INTRODUCTION

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

requires it.

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 NIDB,

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

executive council

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

Economy.

3. To examine the extent of mobilization of funds to finance capital

projects.

4. To examine the sources of funds to the development banking in

Nigeria.

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

development banking?

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

been minimal.

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

actuated.

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.

 

REFERENCES

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.

            




Project Details


Department Social & Management Sciences
Project ID BANFIN0001
Price ₦ 2,000
No of Pages 36
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