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1
Tomi, Saliu Hakeem, Idih Ogwu Emmanual, and Adewole Joseph Adeyinka. "Implications of Non-Performing Loans on the Nigerian Deposit Money Banks." Asian Finance & Banking Review 4, no. 1 (May 2, 2020): 17–23. http://dx.doi.org/10.46281/asfbr.v4i1.556.
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The study examined the arguments and counterarguments within the scientific discussion on the implications of non-performing loans on the Nigerian deposit money banks. The main objective is to examine the effect of Non-Performing loan on the Performance of Deposit Money Banks in Nigeria. Data were sourced from Central Bank of Nigeria Statistical Bulletin. A systematization literary approach for data analysis was Auto Regression distribution lag (ARDL) bound tests. Findings revealed that there exist a long run significant relationship between Non performing loan and the Performance of Deposit Money Banks in Nigeria. It was revealed that persistence increase in Non-performing loans results in poor Performance of Deposit Money Banks in Nigeria. It was also discovered that Non Performing Loan reduces deposit money banks return on asset. The study therefore recommends that deposit money banks should employ competent risk managers that always use their skills to reduce the incident of non-performing loans in the Nigerian deposit money banks. The study also recommends that deposit money banks in Nigeria should always monitor the end-use of funds given to their customers in order to curb the incident of fund diversion which may result in non-performing loan.
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Gololo, Ibrahim Aliyu. "An Evaluation of the Role of Commercial Banks in Financing Small and Medium Scale Enterprises (SMEs): Evidence from Nigeria." Indian Journal of Finance and Banking 1, no. 1 (July 20, 2017): 16–32. http://dx.doi.org/10.46281/ijfb.v1i1.82.
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In this study an attempt was made to evaluate the role of commercial banks in financing small and medium scale enterprises in Nigeria. There is absolutely no doubt that small and medium scale enterprises play a pivotal role and contributes tremendously to the economic growth and development of many developing economy including Nigeria, but survival of Small and medium scale enterprises is often hampered by access to finance which key players were making attempt to solve. The objective of this study is to evaluate the extent to which commercial banks in Nigeria play their role in solving financing needs of small and medium scale enterprises. The study employed secondary data which use the ratio of loans to Small and Medium Scale Enterprises by commercial banks as a percentage of their total credit for the period between 1991-2012.The study utilize paired sample t-test and significance of ratio of loans to Small and Medium Scale Enterprises was tested to access the performance of Small and Medium Scale Enterprises Equity Investment Scheme by banks to provide finance to Small and Medium Scale Enterprises. The result shows that commercial banks loans even with the equity scheme introduction do not make significance positive impact on loan disbursement to finance SMEs. It is recommended that Nigerian commercial banks should embrace risk-averse behavior in respect of loans to SMEs, interest rate should be review for SMEs loans by Central bank of Nigeria and increase SMEEIS contribution by commercial banks. Specialized bank should be established by government to finance SMEs; it should also provide adequate infrastructural facilities in the country and address present security challenges so as to make Nigeria conducive for SMEs to operate.
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Oyebowale, Adeola Y. "Determinants of Bank Lending in Nigeria." Global Journal of Emerging Market Economies 12, no. 3 (September 2020): 378–98. http://dx.doi.org/10.1177/0974910120961573.
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The willingness of commercial banks to provide loans is determined by various factors. In this regard, this paper provides empirical evidence on determinants of bank lending in Nigeria. The parsimonious model of this study investigates the impact of growth in loan-to-deposit ratio, growth in inflation, growth in broad money, and growth in bank capital on growth in bank lending using annual data from 1961 to 2016. This study adopts the autoregressive distributed lag (ARDL) bounds testing approach and Granger causality tests to investigate the relationship and direction of causality among the variables, respectively. The Granger causality tests show that growth in broad money Granger-causes growth in bank lending, while there is no causality from other explanatory variables to bank lending in Nigeria. Also, this study shows that growth in bank lending Granger-causes growth in loan-to-deposit ratio and growth in inflation in Nigeria. Thus, this paper argues that commercial banks in Nigeria exhibit stern concern for their liquidity and capital adequacy positions while acting as financial intermediaries. Additionally, this paper argues that the Central Bank of Nigeria (CBN) possesses “paper-based” independence.
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Waleru, Akani, Henry, and Oparaordu, Beauty. "Determinants of Commercial Banks Credit to the Domestic Economy in Nigeria: Examinations of Dynamics Principles." Indian Journal of Finance and Banking 2, no. 2 (August 8, 2018): 26–41. http://dx.doi.org/10.46281/ijfb.v2i2.96.
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This study examined determinants of commercial banks credit to the domestic economy in Nigeria. The objective was to examine the extent to which banks variables, macroeconomic and monetary policy variables affects credit allocation of Nigerian Commercial Banks. Time series data was sourced from Central Bank of Nigeria Statistical bulletin and financial statement of commercial banks. Percentage of total commercial banks loans to gross domestic product was proxy for dependent variable while the banks specific variables are peroxide by operational efficiency, liquidity, number of commercial banks branches, Commercial Banks Deposit Liabilities and deposit rate. The independent variables in macroeconomic model comprises of real gross domestic product, public expenditure, openness of the economy, inflation rate and exchange rate while monetary policy variables comprises of treasury bills rate, real interest rate, monetary policy rate, growth of money supply and financial sector development. The study employed ordinary least square properties of augmented Dickey Fuller test, co-integration test, and granger causality test and vector error correction model. Findings from the study revealed that; banks specific variables shows that deposit liabilities and liquidity ratio have positive impact on total loans and advances while deposit rate, number of commercial banks branches and openness of the economy have negative impact. Model II found that; exchange rate, inflation rate and Real Gross Domestic Product have positive impact while public expenditure and openness of the economy have negative impact on total commercial bank loans and advances. Model III found that; financial sector development and monetary policy rate have negative impact while growth of money supply, real interest rate and Treasury bills rate have positive impact on total loans and advances of commercial banks. We conclude that monetary policy, bank specific variables or internal variables and macroeconomic variables are strong determinants of Nigerian commercial banks loans and advances. We therefore, recommend for the interplay and the strengthening of macroeconomic variables, monetary policy variables and banks specific variables (internal policies) in order to enhance commercial banks credit in Nigeria.
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Grace Oyeyemi Ogundajo, Adegbemi Babatunde Onakoya, Enyi Patrick Enyi, and Tunji T. Siyanbola. "Financial Institutions’ Inter Mediation and Economic Development in Nigeria." Journal of Accounting and Finance in Emerging Economies 5, no. 1 (June 30, 2019): 33–46. http://dx.doi.org/10.26710/jafee.v5i1.723.
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This paper examines the effect of intermediation capacity of the financial institutions on the Nigerian economic development (Real Gross Domestic Product (RGDP). It is a causal-effect relationship study which made use of macro data obtained from Central Bank of Nigeria (CBN) Statistical Bulletin from the period 1981-2016. The result of the Johansen co-integration test and ARDL bound test evidenced that there exist a long-run relationship between financial institutions’ activities and real GDP. ARDL regression model showed financial institution activities, particularly the loans to the private sector significantly impacted on economic growth both in the short-run and long-run The study also found that bank loans and advances, bank reserves and interest rate had insignificant negative impact on real GDP while credit to private sector significantly affected economic development of Nigeria (RGDP) Thus, economic development of Nigeria is driven by the performance of deposit money banks and concludes that the performance of deposit money banks has effect on the economic development of Nigeria. The study recommended that the banking sector should increase lending to the private sector in order to engender economic growth through the enhancement of entrepreneurial development.
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Agwu, Ejem, Chukwu, and Ogbonna, Udochukwu Godfrey. "Response of Deposit Money Banks to Monetary Policy Dynamics in Nigeria." Applied Economics and Finance 7, no. 4 (May 8, 2020): 33. http://dx.doi.org/10.11114/aef.v7i4.4847.
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This study examined how banks react to the monetary policies transmission mechanisms of the central bank of Nigeria. The data employed were collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria and subjected to various finametric techniques. The major findings are that cash reserve ratio negatively and significantly affects the performance of deposit money banks in Nigeria, while other monetary policy variables exert insignificantly to the performance of deposit money banks. It was also found that apart from banks own shock; banks respond negatively to shocks from major monetary policy instruments. It was observed that Monetary Policy Rate causes bank performance in both in the short run and long run. While, Cash Reserve Ratio, Liquidity Ratio and Saving Deposit Rate do not cause bank performance in the short run but in the long run. It was also found that monetary policy instruments jointly cause bank performance in the short and long run as opposed by individual instruments in Nigeria. The researchers therefore suggest among others that central bank of Nigeria reduce the cash reserve ratio to enable deposit money banks extend more loans to their potential customers, thereby enhance performance.
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Adewole, J. A., F. D. Dare, and J. K. Ogunyemi. "Implications of Financial Intermediation on The Performance of Commercial Banks in Nigeria: 2000-2017." Financial Markets, Institutions and Risks 3, no. 4 (2019): 94–105. http://dx.doi.org/10.21272/fmir.3(4).94-105.2019.
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The paper examined the arguments and counterarguments within the scientific discussion on Financial Intermediation and the performance of Commercial banks in Nigeria. Despite a series of reforms and restructuring aimed at enhancing the bank’s ability to provide services effectively, establish branch networks and finance the real sector, there is still insufficient domestic credit to commercial real-estate banks, affecting the success of financial intermediation in the Nigerian commercial banking sector. The main purpose of this study is to examine the impact of financial intermediation on the performance of commercial banks in Nigeria. The data came from a statistical bulletin of the Central Bank of Nigeria. A systematic literary approach to data analysis is regression analysis. In Equation 1, it was found that there is a significant relationship between total lending and the commercial bank lending rate in Nigeria. In Equation 2, it was found that there is a significant relationship between the overall credit ratio and the cash reserve in the commercial banks of Nigeria. In the commercial bank performance equation, it was found that there is a significant relationship between the total assets and the capital involved by commercial banks in Nigeria. In the commercial bank performance equation, it was found that there was no significant relationship between the loan and deposit ratio and the liquidity ratio in the commercial banks of Nigeria. It has also been found in Commercial Banking Performance Equation 5 that there is a significant relationship between gross domestic product and total credit in the commercial banks of Nigeria. Thus, the study authors recommend reducing the commercial bank loan rate so that investors see commercial banks as the number one source of funding, the Central Bank of Nigeria should increase the commercial banks’ minimum reserve in order to facilitate adequate lending to commercial customers by clients/investors. Commercial banks need to make effective use of the capital used to increase profitability. Commercial banks should help increase liquidity to increase their ability to cover customer withdrawals and increase loans and advances to customers. Commercial banks should allocate proper credit to the real sector for productive purposes in order to increase gross domestic product. Keywords: Financial Intermediation, Commercial Banks, Gross Domestic Product, Commercial Bank Credit.
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Yusuff, Mulkat Ajibola, and Fatimah Olabisi Olaniran-Akinyele. "Financial Deepening And Financial Performance Of Deposit Money Banks In Nigeria." Advances in Social Sciences Research Journal 6, no. 11 (November 17, 2019): 179–91. http://dx.doi.org/10.14738/assrj.611.7351.
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This study examines the effect of financial deepening on financial performance of Nigerian Deposit Money Banks using time-series data spanning 1990Q1-2017Q4. The financial performance is expressed by return on assets (ROA) and return on equity (ROE) with total bank liability, private sector credit and market capitalization as measure of financial deepening. The technique of analysis deployed is autoregressive distributed lag (ARDL) to co integration. The findings show that the effect of total bank liability is positive and significant. Market capitalization and private sector credit on the other hand exert negative and significant effect. The study concludes that financial deepening affect financial performance of Deposit Money Banks in Nigeria. It then recommends effective loan recovery strategy to mitigate the negative influence of private sector credit due to non-performing loans.
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Gabriel, Okoh, Inim Ekemini Victor, and Idachaba Odekina Innocent. "Effect of Non-Performing Loans on the Financial Performance of Commercial Banks in Nigeria." American International Journal of Business and Management Studies 1, no. 2 (May 31, 2019): 1–9. http://dx.doi.org/10.46545/aijbms.v1i2.82.
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The study examined the effect of Non-Performing Loans on the financial performance of commercial banks in Nigeria between the periods of 1985 to 2016. The study employed the multiple regression techniques to analyze data collated from the Central Bank of Nigeria (CBN) statistical bulletin and Nigeria Deposit Insurance Corporation (NDIC) publications for various years. The result of the study shows that Non-Performing Loans to Total Loans ratio (NPL/TLR) and Cash Reserve Ratio (CRR) had statistically negative significant effect on Return on Asset (ROA). These result shows that a high level of non-performing loans would reduce the financial performance of commercial banks in Nigeria. Consequently, the study recommends that the regulatory authorities in Nigeria should create and support an environment where commercial banks in Nigeria can have a strong risk management practices.
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Omankhanlen, Alex Ehimare. "The Effect of Monetary Policy on the Nigerian Deposit Money Bank System." International Journal of Sustainable Economies Management 3, no. 1 (January 2014): 39–52. http://dx.doi.org/10.4018/ijsem.2014010104.
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This study investigates the effect of monetary policy on the Nigerian Deposit Money Bank (DMB) System. The Nigerian banking system is currently under-going a series of reforms in order to enhance its competitiveness and efficiency. The Ordinary Least Square (OLS) method is used to examine the effect of monetary policy on the Nigerian Deposit Money Bank System, using such variables as total loans and advances (TLA) as dependent variable and liquidity ratio (LR),cash reserve ratio (CRR), monetary policy rate (MPR), and average exchange rate (AER) as independent variables. The result of the findings shows that monetary policy rate reveal the most significant effect on commercial banks loans and advances during the period under study. The study thus recommends, among others, that the regulatory authority Central Bank of Nigeria should create credit procedures, policies and analytical capabilities which should be entrenched in the credit management of DMB's operations.
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Akinkoye, Ebenezer Y., and Lukman Oyeyinka Oyelami. "Bank Recapitalization and Real Sector Performance: Empirical Evidence From Nigeria." International Journal of Finance & Banking Studies (2147-4486) 3, no. 1 (January 19, 2016): 126. http://dx.doi.org/10.20525/.v3i1.174.
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<p>This study investigates the impact of bank recapitalization on real sector performance in Nigeria. Specifically, the study examines the direct effect (bank investment) and indirect effect (loans and advances to real sector) on real<br />sector output growth between the period 1986 and 2012.This study departs from previous studies because we aggregate the three leading sectors (agriculture, manufacturing and building and construction) of the Nigerian<br />economy to arrive at our real sector index. Also, having carefully subjected our data to necessary econometric tests we employed chow test for structural break to test for the existence of policy shift between bank capital base and loan<br />to the real sector of the Nigerian economy as a result of bank recapitalisation policy .Similarly, OLS estimates was used to determine the direct and indirect effect of bank capital base and real sector output growth. The results from<br />structure break tests reveal that bank recapitalization policy causes policy shift in bank capital base and loan to real sector thus the policy is of significant impact to real sector performance .In corollary, the result from the OLS strongly<br />indicates that bank capital base has significant effect on real sector output growth directly and indirectly. We then conclude that Nigerian banks should be adequately capitalised as to play active intermediateting roles expected of<br />them in this modern and competitive global economy</p>
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Oseghale, Ihayere, Ugege Joseph, and Abu Prince. "DEPOSITORY INSTITUTIONS AND SUSTAINABLE AGRICULTURE IN NIGERIA." International Journal of Research -GRANTHAALAYAH 8, no. 5 (June 4, 2020): 173–78. http://dx.doi.org/10.29121/granthaalayah.v8.i5.2020.123.
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Aligning with Goal two of Sustainable Development Goals (SDGs2) to accomplish zero hunger by the year 2030. This research dives deeper into how Agriculture can be sustained to actualize SDGs2 through the assistance of depository Institutions. The results show that deposit money bank loans, deposit money bank loans rate, exchange rate, government expenditure and agricultural credit sector fund have pose positive effect on agricultural output, only the duo of exchange rate and agricultural credit sector fund indicate a significant impact on agricultural output at the 5% level of significance while deposit money bank loans have a slightly positive significant effect on agricultural output at approximately 10% level of significance. This implies that across the period under investigation, deposit money bank loans, exchange rate and agricultural sector credit fund impose significant and positive contribution to agricultural output.
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K Ozili, Peterson. "BANK PROFITABILITY DETERMINANTS: COMPARING THE UNITED STATES, NIGERIA AND SOUTH AFRICA." Vol. 16, Number 1, 2021 16, Number 1 (January 30, 2021): 55–78. http://dx.doi.org/10.32890/ijbf2021.16.1.4.
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This study investigates the determinants of banking sector profitability in South Africa, Nigeria and the United States. The findings reveal that cost efficiency, the size of non-performing loans and overhead cost to total asset ratio are significant determinants of the banking sector profitability. In the comparative analysis, the findings from South Africa show that the cost efficiency ratio, overhead cost to total asset ratio and non-performing loans are significant determinants of the banking sector profitability. In the United States, capital adequacy ratio and the size of non-performing loans are significant determinants of its banking sector profitability. In Nigeria, the overhead cost to total asset ratio and cost efficiency ratio are significant determinants of the banking sector profitability. The descriptive analysis reveal that bank net interest margin and return on asset are higher in Nigeria and lowest in the United States which suggests that the Nigerian banking sector is more profitable than the US banking sector. Return on equity is higher in South Africa and lowest in the United States.
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Muritala, Taiwo Adewale, Muftau Adeniyi Ijaiya, Ahmed Oluwatobi Adekunle, and Mobolaji Kafayat Abidoye. "Capitalization and bank performance: Evidence from Nigerian Banking Sector." e-Finanse 13, no. 4 (December 1, 2017): 67–75. http://dx.doi.org/10.1515/fiqf-2016-0036.
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AbstractThe study examines the impact of capitalization on bank performance of some selected commercial banks in Nigeria using econometric analysis on annual time series data of ten banks over the period of 2006 to 2014. The results from a Levin, Lin & Chu unit root test show that all the variables were non-stationary. The results from a Panel Least Square (PLS) estimate found that operating expenses, bank size and bank loan are negatively related to profitability but only bank loans are significant. On the other hand, bank deposit and bank liquidity are positively related to profitability but not significant. This conclusion has important policy implications for emerging countries like Nigeria as it suggests that capitalisation and total assets of a bank should be periodically evaluated. The regulatory authorities will therefore need to put in place appropriate machinery that will address issues of bank liquidity and assure asset quality in the industry.
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Lakai, Lohya Ibrahim. "The Role of International Institutions (E.G. World Bank) In Co-Financing Public Institutions in Nigeria: Obstacles and Challenges for an Effective and Transparent Procedure." KAS African Law Study Library - Librairie Africaine d’Etudes Juridiques 6, no. 4 (2019): 577–603. http://dx.doi.org/10.5771/2363-6262-2019-4-577.
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Nigeria as a state is a member of many international institutions and organizations. Nigeria has also benefited from these institutions particularly financial institutions. For example, the World Bank, International Monetary Fund (IMF) Paris club, The German Development Bank (KWF), African Development Bank, etc. through loans, grants and aid assisted the Nigerian Government in funding some projects and institutions. Despite this funding, Nigeria Institutions continues show little or no impact commensurate to the funding plunged. This work tries to discuss the role of international institutions in co-financing public institutions in Nigeria. In discussing the role of international institutions, the obstacles and challenges for an effective and transparent procedure will be considered as well as proffer solutions to them.
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Mafimisebi, Taiwo, Adegboyega Oguntade, and Ojuotimi Mafimisebi. "Re-engineering agriculture for enhanced performance through financing." Cuadernos de difusión 15, no. 29 (December 30, 2010): 35–49. http://dx.doi.org/10.46631/jefas.2010.v15n29.03.
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Insufficient institutional credit is a major contributor to the persistent poor performance of the Nigerian agricultural sector. To encourage financial institutions to increase lending to the sector, a partial credit guarantee scheme was instituted. The scheme commenced operations in 1978 with an authorized capital of N 100.00 million, subscribed to 60% and 40% by the Federal Government of Nigeria and the Central Bank of Nigeria, respectively. This paper presents an appraisal of the scheme. The results revealed that there has been continuous growth in paid-up share capital, total fund resources, maximum amount of loan obtainable by farmers, number and value of loans guaranteed, volume and value of loans fully repaid and volume and value of default claims settled. There was a long-run convergence between the number and volume of guaranteed loans and the agricultural GDP. This finding indicates the need to expand the quantum of funds available for guaranteeing agricultural loans to increase performance of the agricultural sector in the long run. This step is justified by the strategic role of agriculture in the Nigerian economy in terms of food and fiber production, job creation, income generation, poverty reduction and economic stability.
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Barida Biiranee, Kelvin Friday. "Retail Banking and Bank Performance: Evidence from Nigeria." International Journal of Economics and Finance 13, no. 5 (April 10, 2021): 45. http://dx.doi.org/10.5539/ijef.v13n5p45.
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This is a correlational research design that intended to examine the nexus between retail banking and financial performance of banks in Nigeria. The Panel Least Squares regression results aided the study in ascertaining the coefficient, standard error, t-statistic and probability. The tabulated ratios were exported to EViews 9.0 to run the panel regression. Data were collected and analyzed based on the annual reports available on the website of 16 banks listed on the Nigerian Stock Exchange as at 31st December 2018 out of the approved 22 commercial banks in Nigeria. The result of findings revealed that Size and Competition significantly impacted on bank performance with a probability of 0.0071 and 0.0178 respectively which is less than 5% degree of significance; and Loans and deposits relationships were all not significantly impacting on bank performance, as the probabilities for all variables were more than the acceptable 5% degree of significance. Based on the outcome of findings the following conclusions were drawn that; Size which is the natural logarithm of Total Assets and Competition which is the natural logarithm of Total Deposit is significantly responsible for bank performance in Nigeria. The study therefore recommended that professional bankers should continually focus on growth and expansion drive that will increase the size of the bank and enable the banks to compete nationally and internationally in order to drive profitability. Banks that want to experience optimum performance should focus more on policies that will attract huge retail deposit to the bank being that the savings component of the total deposit banks in Nigeria comes at a ridiculously cheap rate to the banks and banks loaned out these deposits at high margin.
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Akinkoye, Ebenezer, and Lukman Oyeyinka Oyelami. "Bank Recapitalization and Real Sector Performance." International Journal of Finance & Banking Studies (2147-4486) 3, no. 1 (July 21, 2014): 126–36. http://dx.doi.org/10.20525/ijfbs.v3i1.174.
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This study investigates the impact of bank recapitalization on real sector performance in Nigeria. Specifically, thestudy examines the direct effect (bank investment) and indirect effect (loans and advances to real sector) on realsector output growth between the period 1986 and 2012.This study departs from previous studies because weaggregate the three leading sectors (agriculture, manufacturing and building and construction) of the Nigerianeconomy to arrive at our real sector index. Also, having carefully subjected our data to necessary econometric testswe employed chow test for structural break to test for the existence of policy shift between bank capital base and loan to the real sector of the Nigerian economy as a result of bank recapitalisation policy .Similarly, OLS estimates was used to determine the direct and indirect effect of bank capital base and real sector output growth. The results from structure break tests reveal that bank recapitalization policy causes policy shift in bank capital base and loan to real sector thus the policy is of significant impact to real sector performance .In corollary, the result from the OLS strongly indicates that bank capital base has significant effect on real sector output growth directly and indirectly. We then conclude that Nigerian banks should be adequately capitalised as to play active intermediateting roles expected of them in this modern and competitive global economy.
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Ogudo, Valentine, and Babatunde Afolabi. "Non-Performing Loans and Banks’ Performance in Nigeria: Evidence From First Bank Nigeria Plc." Journal of Economics and Business 1, no. 1 (April 10, 2018): 107–19. http://dx.doi.org/10.31014/aior.1992.01.01.10.
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Success Ikechi, Kanu, and Nwadiubu Anthony. "Commercial Bank Loans and the Performance of Small and Medium Scale Enterprises (SMEs) In Nigeria." International Journal of Innovation and Economic Development 6, no. 6 (2021): 46–59. http://dx.doi.org/10.18775/ijied.1849-7551-7020.2015.66.2004.
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The contributions of Small and Medium Scale Enterprises (SMEs) to the growth of Nigerian economy cannot be understated as they seem to drive the economic and industrial transformation of the country. Notwithstanding the acknowledged role of SMEs, a number of factors tend to limit their growth potentials. They’re still faced with the issue of funding and to overcome this problem, external borrowing has become inevitable. Commercial banks appear to be the most likely source of funds. Thus, the main objective of this study is to ascertain the impact of commercial bank loans on the performance of small and medium scale enterprises in Nigeria. While an ex-post facto research design was adopted in the investigation; a least square regression analysis was carried out on a time-series data to ascertain relationships, and to avert the emergence of spurious results, unit root tests were conducted. Outcome of the study indicates that, there exists an inverse relationship (though not statistically significant) between the amount of commercial bank loans (CBLSME) made available to SMEs and the output of SMEs (OPSME) in Nigeria This implies that as CBLSME increases, OPSME decreases. The negative sign exhibited by OPSME is not in line with our apriori expectation because an increase in CBLSME is supposed to cause an increase in investment which is expected to boost the output of SMEs. This trend has shown the poor attitude of commercial banks towards the granting of loans to SMEs in Nigeria. The study also revealed that a seeming upsurge in the activities of SMEs may not have reduced the rate of unemployment in Nigeria as a good number of people employed by the SMEs are probably under-employed. Conclusively, the inability of our commercial banks to grant effective loans to SMEs have translated to low level of output of SMEs to GDP. This in turn has impacted negatively on average capacity utilization and a consequent hike in the already strained unemployment situation in Nigeria. While commercial banks are expected to come to the rescue of SMEs, the truth must be said, that these institutions are profit oriented and may not be in a vantage position to give long term loans with depositors funds that are predominantly short tenured. Based on the findings of study, it is recommended that, the intervention programs put in place by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to ameliorate the challenges of the SMEs should be strengthened. It is not out of place too, for commercial banks to re-jig their SME desks in order to offer sustainable financial assistance to the SMEs. Lastly, the Bank of Industry (BOI) should be properly positioned in its mandate of providing financial assistance for the establishment of large, medium and small projects as well as the expansion, diversification and modernization of existing enterprises and to rehabilitate the ailing ones.
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Efanga, Udeme, Ihemeje, J. C, Yamta H. A, and Birawada Keyadi. "Interest Rate Spread and the Efficacy of Commercial Banks’ Loans and Advances in Nigeria." Journal of Accounting and Finance in Emerging Economies 6, no. 3 (October 7, 2020): 753–63. http://dx.doi.org/10.26710/jafee.v6i3.1179.
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Abstract: The main objective of this study is to analyze the impact of interest rate spread on the efficacy of commercial banks’ lending in Nigeria. Data were obtained from secondary sources; Central Bank of Nigeria Statistical bulletin of 2018 and International Monetary Fund, International Financial Statistics and data files. Unit root test on the time series data displayed a combination of 1(0) and 1(1) variables, the Autoregressive Distributed Lag (ARDL) Model was employed for data estimation. Several diagnostic tests such as auto-correlation test, Ramsey stability test, serial correlation test and test for heteroscedasticity were also carried out and they all confirmed the goodness of fit and validity of the model employed. Findings reveal that: interest rate spread impacted positively and significantly on commercial banks’ loans and advances in Nigeria. The study therefore concludes that interest rate spread impacted commercial banks’ loans and advances in Nigeria positively across the period covered by this study. The study recommend that commercial banks in Nigeria should maintain their current interest rate spread strategy, since it is working well for them and helping them realize a high demand for their loans and advances in Nigeria.
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Nnah Ugoani, John Nkeobuna. "Credit Risk Management Evaluation and Bank Management Effectiveness: 1995 – 2015 Dimensionality." Sumerianz Journal of Economics and Finance, no. 310 (October 30, 2020): 178–88. http://dx.doi.org/10.47752/sjef.310.178.188.
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Credit risk management is central to the success or failure of a banking institution because banks earn the greatest quantum of their interest income from interest on loans which represents a critical component of a bank’s profitability. Therefore, any carelessness with regard to credit risk management automatically results to creating huge nonperforming loans which often prepares the grounds for bank distress or failure. In the 1990s and specifically in 1995, 50 percent of 120 banks became technically distressed, as they were characterized by poor management and weak liquidity ratio. For example, in 1995, the ratio of nonperforming loans to total loans was about 33 percent compared to about 5 percent in 2015, and the average liquidity ratio of banks in 1995 was 0.49, against 58.18 in 2015. Also the loans, to deposit ratio in 1995 was 58.4 and 73.21 in 2015, while the number of banks with average liquidity ratio of less than 30 percent was 50 in 1995 against 1 in 2015. Distress persisted in the Nigerian banking system in the 1990s with dwindling profitability and the erosion of shareholders’ equity. In 1995, the adjusted shareholders funds was – N8791.1million against N3,240 billion in 2015, while the capital to total risk weighted asset ratio was about 67.18 percent in 1995 and only about 17.66 percent in 2015. In 1995, the ratio of nonperforming loans to shareholders’ funds was about 496 percent against about 13 percent in 2015. These major performance indicators showed that there was improved credit risk management and bank management effectiveness after 1995 until 2015. The expo-facto research design was employed for the study and the result showed strong positive relationship between credit risk evaluation management and bank management effectiveness. The study was not exhaustive, and further research could examine the relationship between regulatory efficiency and the performance of deposit money banks in Nigeria. The board of directors of banks should always take measures to avoid lending arrangements over and above the repayment capacity of borrowers to reduce the creation of nonperforming loans.
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Namnso, Bassey Udoekanem. "Financing affordable housing in Niger State of Nigeria through commercial banks : trend, issues and future directions." Social and Management Research Journal 8, no. 1 (June 1, 2011): 85. http://dx.doi.org/10.24191/smrj.v8i1.5198.
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This study explored the trend in interest rates on real estate loans granted by commercial banks in Nigeria. Primary data used for the study were collected from selected real estate firms in Minna, the capital of Niger State of Nigeria, which are active in the residential property market in the city. The secondary data were obtained from the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS). Results of data analysis revealed that variation in interest rates on real estate loans granted by commercial banks in Nigeria in the past three years was statistically significant at 0.05 level ofsignificance, an indication that interest rates on real estate loans granted by commercial banks in the country did not follow a similar trend. The paper examined the implications ofthis trend on affordable housing finance in Niger State of Nigeria and argues that more than 90 per cent of the households in Niger State could not afford real estate loans granted by commercial banks for housing development and acquisition in the area at the current interest rates. The paper concluded that greater involvement ofthe government at all levels in the provision of long-term real estate credit at affordable interest rates is necessary if housing finance to be made affordable for the low-income groups in Niger State, Nigeria.
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Rakshit, Sandip, and Mokhalles Mohammad Mehdi. "Standard microfinance bank, Nigeria: developing underserved markets." Emerald Emerging Markets Case Studies 11, no. 2 (August 16, 2021): 1–24. http://dx.doi.org/10.1108/eemcs-10-2019-0257.
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Learning outcomes To understand the challenges of building a successful business in an emerging market like Yola, Nigeria. To understand the role of micro-finance banks in doing business in Yola, Nigeria. To comprehend strategies adopted in market segmentation and sales of products or services to the customer. To apprehend strategies adopted to sustain and compete in Nigeria – both rural and urban. Case overview/synopsis Standard Microfinance Bank Limited (SMFB) was a private micro-finance bank situated at Yola, Adamawa State of Nigeria. It initially started as a community bank in 1992 to provide loans to individuals and small business owners in Adamawa. It started with the services of payment service and savings account with a limited lending capacity. It had become a full-fledged retail bank and was grown to 13 branches across Nigeria. It planned for expansion such as market development, product development and diversification by the year 2020. It had a customer base of 60,000 till the end of December 2018. Vazheparambil Mani Francis was the Chief Executive Officer (CEO) of the SMFB. The SMFB faced challenges such as operating the remote villages, lack of financial literacy among people, recovery of the loan amount, submission of false credentials and change of customer identity after loan by their customer. It was not going to be an easy task for him to operate the business of SMFB in Nigeria. However, in December 2018, Francis was facing a dilemma about the future success of SMFB business in Nigeria by looking into the challenges and complexities of business. Francis was determined to figure out the appropriate growth strategy for managing the challenges. Complexity academic level Undergraduate and graduate early-stage program. Supplementary materials Teaching notes are available for educators only. Subject code CSS 11: Strategy.
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Godswill, Osuma, Ikpefan Ailemen, Romanus Osabohien, Ndigwe Chisom, and Nkwodimmah Pascal. "Working capital management and bank performance: empirical research of ten deposit money banks in Nigeria." Banks and Bank Systems 13, no. 2 (June 18, 2018): 49–61. http://dx.doi.org/10.21511/bbs.13(2).2018.05.
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Working capital management is germane for the success of the banking industry in Nigeria, especially the current state of the sector, which is engulfed with the effect of the global decline in oil price that has resulted in non-performing loans, deterioration of the bank asset quality, laying-off of staff amongst others. This is one of the reasons why the profitability of the banking sector deeply depends on the efficient management of a bank’s working capital. Therefore, the objective of this study is to examine how profitability of banks can be enhanced through the working capital management. To empirically carry out the analysis, panel data which consist of ten (10) deposit money banks in Nigeria for seven years (2010–2016) employing the panel fixed effect, panel random effect and the pooled OLS for the two models, which were used as proxies for bank profitability, which includes return on asset (ROA) and return on equity (ROE) to examine the best measure for bank profitability, with the indicators of working capital; net interest income, current ratio, profit after tax, and monetary policy rate. Results of the study showed that working capital management has a significant effect on the profitability of the selected banks and that return on asset is a better measure for bank profitability. Therefore, the study recommends that there should be a periodic review of the minimum capital base of the Nigerian deposit money banks so as to mitigate the effects of inflation and inculcate the consequence of time value of money, because the purchasing power of one (₦1) naira or one ($1) dollar today would not be sufficient to purchase what it can purchase today for tomorrow.
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N., Ekponaanuadum, and Kenigheni G. "Interest Rate Deregulation and the Performance of Deposit Money Banks in Nigeria from 1989-2020." African Journal of Economics and Sustainable Development 4, no. 2 (August 9, 2021): 86–95. http://dx.doi.org/10.52589/ajesd-sd66ucr6.
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The research examined interest rate deregulation and the performance of deposit money banks in Nigeria for the period of 1989-2020. The objective of the study is to examine the impact of interest rate deregulation on the performance of deposit money banks in Nigeria and to examine the causal relationship between interest rate deregulation and performance of deposit money banks in Nigeria. The estimation output of the research shows a positive relationship between interest rate and bank performance in Nigeria measured by Total Assets of Deposit money banks in Nigeria. The coefficient of determination (67%) also shows above average explanatory power of the independent variables on the dependent variable. The results of the study show a long and short run relationship between the dependent variable (Total Assets) and the independent variables (Interest rate, inflation rate, loans and advances). The result also shows unidirectional causality between Total Assets and Loans and Advances. The research recommended among others that the CBN should consider not frequently changing the MPR (monetary policy rate) and CRR (Cash reserve ration) which most of the time influence interest rate peg of the deposit money banks.
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Meriam, Nwogu, and Emmanuel O. Eyo. "Impact of Bank Loans on Agricultural Output Growth in Nigeria." Social Sciences 14, no. 6 (October 31, 2019): 266–75. http://dx.doi.org/10.36478/sscience.2019.266.275.
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Olugboyega, KAJOLA Sunday, ADEDEJI Samuel Babatunji, OLABISI Jayeola, and BABATOLU Ayorinde Tobi. "Effect of Credit Risk Management on Financial Performance of Nigerian Listed Deposit Money Banks." Scholedge International Journal of Business Policy & Governance ISSN 2394-3351 5, no. 6 (January 9, 2019): 53. http://dx.doi.org/10.19085/journal.sijbpg050601.
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<p>Deposit money banks are concerned with the provision of credit facilities in form of loans and advances to customers. These loans and advances are expected to be repaid by customers in line with the agreement reached with their bankers. Customers’ default in the repayment of loans and advances at the agreed period may lead to bad and doubtful debts and this can affect the financial health, profitability and going concern status of the bank. This study empirically explored the effect of credit risk management on the financial performance of ten listed deposit money banks in Nigeria for the period, 2005-2016. Credit risk management, the independent variable, was surrogated by three parameters- Non-performing Loan to total Loan Ratio (NPLLR); Non-performing Loan to total Deposit Ratio (NPLDR) and Capital Adequacy Ratio (CAR). Return on asset (ROA) and Return on equity (ROE) was used as proxies for financial performance. Using the Random effects generalised least squares (GLS) regression as data estimation technique, the study revealed that all the three credit risk parameters have a significant relationship with ROA and ROE (p< 0.05).Based on the findings, the study recommended that the management of deposit money banks should develop rigorous and robust credit policies that will enable banks to effectively assess the creditworthiness of their customers. The regulatory agencies should also come up with modern credit risk measurements, identification and control. Prompt and necessary action should also be taken against the management of any bank that flouts their credit risk guidelines in order to avoid unpleasant distress in the financial system. </p>
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OZSOZ, EMRE, MUSTAPHA AKINKUNMI, ISMAIL CAGRI AY, and ADEMOLA BAMIDELE. "HOW CBN CONFRONTED THE MELTDOWN: THE GLOBAL FINANCIAL CRISIS AND THE CENTRAL BANK OF NIGERIA’S RESPONSE." Singapore Economic Review 62, no. 01 (March 2017): 147–61. http://dx.doi.org/10.1142/s0217590817400070.
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This paper provides an analysis of policy responses to the Global Financial Crisis by the Central Bank of Nigeria (CBN). Given its unique position as a major commodity exporter with a large population, Nigerian authorities utilized a mixture of policies including reductions in the monetary policy rate and capital reserve requirement, lending through the expanded discount window, money market interbank transactions guaranty and limitations on deposit money banks’ (DMBs) foreign exchange net open positions. CBN also rolled over margin loans that were extended to equity investors. As a result the country weathered the financial crisis with limited damage and recorded positive growth rates between 2008 and 2010.
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Adeniyi, Adetunji. "Nigeria’s Bank of Agriculture: An Agenda for Organizational Renewal." Journal of Business Administration Research 10, no. 1 (May 8, 2021): 41. http://dx.doi.org/10.5430/jbar.v10n1p41.
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Bank of Agric (BoA) was establish as a special purpose specialized financial institution to provide agricultural loans to deserving customers as a way to promoting access to affordable credit facilities to segments of the Nigerian society that have little access to the services of conventional banks while accepting savings deposits from customers and encouraging banking habits at the grass-roots. However, the performance of the bank has been below expectation because it has not fulfilled purpose. In a country like Nigeria of N200 million population, where agriculture currently provides about 54 per cent of employment and the quest for economic resilience and sustainability is further driving diversification into agribusiness, improving access to agricultural credit, is imperative. It is against this background that the need to reposition the bank becomes necessary. It is recommended that the bank be partially privatised for access to increased / private capital, while its operations should be modernized and computerized to improve customer convenience and operational efficiency.
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Akpan, Umoren, Aniefiok, Eyo, Emmanuel Okon, and Akpan, Sunday Brownson. "Investigating the nexus between Non-Performing Loans in the Nigerian Banking System and Lending to Micro-Small Medium Enterprises." International Journal of Contemporary Research and Review 9, no. 06 (June 1, 2018): 20778–91. http://dx.doi.org/10.15520/ijcrr/2018/9/06/516.
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Micro-Small and Medium Enterprises (MSMEs) constitute vital ingredients for the lubrication of the development process of any economy. Therefore, Micro-Small and Medium Enterprises are bedrocks of emerging economies as they exact vital roles in promoting and sustaining growth and development. However, in Nigeria MSMEs are facing myriad of challenges and difficulties in funding their activities. Rising trends in Non-performing loans (NPLs) adversely affected availability of loans and advances to economic agents in the Nigerian economy thereby constraining financial intermediation and economic activities hence growth. The study investigated the nexus existing between NPLs in the Nigerian banking system and lending to MSMEs sub-sector in Nigeria from 1981-2015. Time series data used in the study were collected from annual statistical bulletin of the Central Bank of Nigeria (CBN). These data were subjected to descriptive and inferential methods. The results of the graphical presentations indicated irregular fluctuations in NPLs. The graphs indicated positive trends in respect to lending to MSMEs and the productivity of MSMEs. The estimated OLS results showed negative nexus between non-performing loans and lending to MSMEs. This negative nexus led to concomitant low MSMEs productivity in Nigeria. The study recommended that CBN should increase its financial surveillance over the sectors and also ensure timely resolutions of the NPLs challenges CBN should increase arrays of financial intervention that would address paucity in funds in the MSMEs sub-sector
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Morakinyo, Akinola Ezekiel, and Mabutho Sibanda. "The Determinants of Non-Performing Loans in the MINT Economies." Journal of Economics and Behavioral Studies 8, no. 5(J) (October 30, 2016): 39–55. http://dx.doi.org/10.22610/jebs.v8i5(j).1430.
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This paper investigates the major determinants of non-performing loans in the MINT (Mexico, Indonesia, Nigeria and Turkey) economies. Identifying major determinants of non-performing loans, which are observed to be growing in these countries in recent time, will also guide policy and forecasting future levels that will be useful for pre-emptive policies and actions. It uses static panel data and dynamic panel model analyses. Evidence suggests that in the four economies, capital adequacy ratio, liquidity ratio, total bank credit andreturn on assets are significant bank-specific determinants of non-performing loans. Also, while the return on assets, liquidity ratio and capital adequacy ratioshow a negative and significant relationship with non-performing loans, nominal exchange rate, money supply growth rate, total bank credit and lending rate show positive and very significant relationships with non-performing loans. Finally, corruption, an institutional variable, shows a very strong positive relationship with non-performing loans.
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K, Subair, and Soyebo Yusuf A. "Banks Intermediation and Stock Prices of Deposit Money Banks in Nigeria: VECM and Variance Decomposition Approach." Jinnah Business Review 8, no. 1 (January 1, 2020): 102–12. http://dx.doi.org/10.53369/hwxw1884.
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This study adopts the Vector Error Correction Model (VECM) and the variance decomposition techniques in testing the financial acceleration theory in banks intermediation. The bank intermediation variable is categorized into variable deposit mobilization, loan administration, delegated monitoring and risk diversification. Using cointegration analysis and quarterly secondary data between 2009 and 2016, this study assessed the short and long run influence of the categorized bank activities on their stock prices. The results indicate that banks intermediation exact influence on both the short and long run stock prices of DMBs in Nigeria as the ECM (-0.1420) result showed a significant speed of adjustment towards equilibrium while the overall model fitness showed that there is a long run causality running from banks intermediation measures and stock prices. Similarly, the result of the variance decomposition of stock prices shocks indicate that over time a significantly increasing proportion of stock prices is explained by loans and capital (delegated monitoring).
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Ukinamemen, Arekhandia Alfred, and Hassan O. Ozekhome. "DOES CAPITAL ADEQUACY INFLUENCE THE FINANCIAL PERFORMANCE OF LISTED BANKS IN NIGERIA?" Oradea Journal of Business and Economics 4, no. 2 (September 2019): 69–80. http://dx.doi.org/10.47535/1991ojbe079.
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Capital adequacy is important for the effective operation of any institution, particularly, its sustenance, viability and future growth. Banks as core financial institutions require sufficient capital base for its fund requirement and needs. Against this premise, banks and other financial institutions must keep balance between capital and available risk in its assets in order to reduce the likelihood of systemic crises, financial fragility and thus guarantee stability. This study empirically examines the impact of capital adequacy on the financial performance of banks in Nigeria. A sample of ten (10) listed banks on the basis of size and availability of data were examined over the period 2010 to 2017, using descriptive statistics, and multivariate panel data estimation technique, after conducting the Hausman, test of correlated random samples, wherein the fixed effect model was selected as the appropriate model. The empirical results revealed that banks’ capital adequacy ratio has a positive and significant impact on the financial performance of banks in Nigeria. Other variables found to be significant in the determination of the financial performance of banks in Nigeria are; bank size, bank loans and advances, debt ratio and growth rate of output. Against the backdrop of these findings, we recommend amongst others; sufficient capital base for banks, increased bank size through economies of scale measures, efficient deployment of bank resources, increased economic output (economic productive capacity) that will stimulate bank performance. These, will, in no doubt, reduce banks’ vulnerability to systemic crises and consequently enhance their stability for national growth through efficient financial intermediation.
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Alalade, Yimka S. A., Ezekiel Oseni, and Olusegun A. Adekunle. "Monetary Policy and Financial Performance of Deposit Money Banks in Nigeria." Asian Social Science 16, no. 11 (October 31, 2020): 123. http://dx.doi.org/10.5539/ass.v16n11p123.
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This study considered the influence of monetary policy on the financial performance of deposit money banks in Nigeria. The study engaged the use of a time series data for 35 years, from the period 1984 to 2018; all deposit money banks as captured by the Central Bank of Nigeria Statistical Bulletin (2015) were considered. The effect of liquidity ratio, lending rate, loan to deposit ratio and cash reserve ratio were examined on the financial performance of deposit money banks measured by their net worth and total credits. The data was analyzed using descriptive and inferential statistics. Based on the result of stationarity test, the ordinary least square method and the Autoregressive Distributed Lag method were employed. A short run model of net worth and long run model for both the log of net worth and the log of total credits were estimated. The results revealed that the mean of net worth and total credits are 5455.27 and 79608.63 respectively. In the long run, monetary policy variables including liquidity ratio, lending rate, loans to deposit ratio and cash reserve ratio had no significant effect on the log of net worth. However in the short run, variations in the liquidity ratio, loans to deposit ratio and the cash reserve ratio for previous years had significant effect on the log of net worth in the current year. When financial performance is measured as total credits, the liquidity ratio and loans to deposit ratio had positive significant effect in the long run. The cash reserve ratio had a negative significant effect in the long run. The log of lending rate was insignificant in both the long and short run. The study concluded that monetary policy significantly explains the financial performance of deposit money banks both in the short and long run.
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Ugoani, John N. N. "NONPERFORMING LOANS PORTFOLIO AND ITS EFFECT ON BANK PROFITABILITY IN NIGERIA." Independent Journal of Management & Production 7, no. 2 (June 1, 2016): 303–19. http://dx.doi.org/10.14807/ijmp.v7i2.406.
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Sakanko, Musa Abdullahi, Joseph David, and Aliyu Musari Onimisi. "Advancing inclusive growth in Nigeria: The role of financial inclusion in poverty, inequality, household expenditure, and unemployment." Indonesian Journal of Islamic Economics Research 2, no. 2 (October 25, 2020): 70–84. http://dx.doi.org/10.18326/ijier.v2i2.3914.
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This study employs ARDL bounds testing technique to examine the effect of financial inclusion on inclusive growth in Nigeria, using quarterly data from 2007-2018. The empirical evidence reveals the presence of cointegration between financial inclusion indicators (account ownership, access to bank, ATM and credit, loans to SMEs and internet usage) and inclusive growth (poverty, household expenditure, employment, and per capita income). The results demonstrate that, while increase in account ownership, and access to bank and ATM raise poverty, and access to credit, loans to SMEs and internet usage reduces employment and per capita income in the long-run, it was also discovered that access to credit reduce poverty and increase household consumption, while account ownership and access to bank increases employment and per capita income in the long-run. In the short-run: lag of account ownership, access to ATM and credit, loan to SMEs and internet usage reduces poverty; lag of household expenditure, account ownership, and access to ATM and lag of internet usage increases household expenditure; lags of access to ATM and lags of internet usage (and account ownership and access to bank) increases employment opportunities (and per capita income); and access to ATM and credit reduces employment and per capita income respectively.
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Bolarinwa, Segun Thompson, Olufemi Bodunde Obembe, and Clement Olaniyi. "Re-examining the determinants of bank profitability in Nigeria." Journal of Economic Studies 46, no. 3 (August 2, 2019): 633–51. http://dx.doi.org/10.1108/jes-09-2017-0246.
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Purpose The purpose of this paper is to re-examine the determinants of bank profitability in Nigeria. Specifically, the study investigates the effect of managerial cost efficiency on bank profitability. Also, since there exist mixed results and controversies in the literature, in both developed and developing countries, regarding the effect of efficiency on bank profitability, this study employs the standard measure of efficiency. In addition, the work incorporates the role of persistence, which is often neglected in the literature in developing countries. Design/methodology/approach This study employs system generalized method of moments. Findings The findings, using the case of Nigeria, show that cost efficiency is a strong determinant of bank profitability in developing countries. In addition, the profitability of banks in Nigeria persists over time; hence, the industry is fairly competitive. Research limitations/implications The recent policies of banking industry recapitalization meant to increase profitability and stability in Nigeria and other African countries’ banking industry will not be effective if the issue of managerial efficiency is not properly addressed. Practical implications Improving the banking managerial efficiency will positively reduce bad loans, hence leading to the stability in the banking system. Originality/value The authors introduce efficiency using standard measure of stochastic frontier analysis for its measurement. Also, this study introduces the role of persistence in the literature in developing countries.
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M. Etale, Lyndon, and Amaka, P. T. Bailey. "The Relationship between Bank Lending to Agricultural Sector and Agricultural Earnings in Nigeria." Sumerianz Journal of Economics and Finance, no. 41 (February 18, 2021): 25–34. http://dx.doi.org/10.47752/sjef.41.25.34.
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This study examined the relationship between bank lending to agricultural sector and agricultural earnings in Nigeria using secondary data obtained from various editions of the Central Bank of Nigeria Statistical Bulletins. Secondary data collected for the selected study variables covered ten years period from 2009 to 2018. The study adopted bank loans and advances to agriculture, interest rate, and inflation as independent variables, while agricultural earnings representing gross national agricultural output was used as dependent variable. The study employed descriptive statistics and multiple regression analysis based on the OLS technique assisted by the E-view 10 computer software as the statistical tools for data analysis. The results revealed that all the independent variables had positive relationship with agricultural earnings. Specifically, bank loans and advances to agriculture had statistically significant effect on agricultural earnings. The regression results also showed that the coefficient of determination (R-squared) value of 0.86 indicates that 86% of changes in the dependent variable (AGE) were explained by the combined effect of changes in the independent variables. The study concluded that bank lending to the agricultural sector has a significant positive relationship with agricultural earnings in Nigeria. The study recommended among others that the CBN should step-up policy making, execution and monitoring of bank lending to agriculture; and that the Federal Government through the Federal Ministry of Agriculture should declare a state of emergency on agriculture and make the sector more attractive and viable for investment.
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Olusola, ABERE Benjamin, and Teniola Abosede. "Global Financial Crisis and the Profit Efficiency of First Bank of Nigeria PLC; a Stochastic Frontier Analisis." International Journal of Contemporary Research and Review 11, no. 01 (January 18, 2020): 21700–21717. http://dx.doi.org/10.15520/ijcrr.v11i01.779.
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This study examines the Impact of Financial Crisis on the Profit Efficiency of First Bank of Nigeria Plc. The study makes use of data covering the period 1981-2017. The objective of the research work is to analyse the trend in efficiency of First Bank of Nigeria Plc before, during and after the financial crisis The study rests on the Minsky Financial Instability Hypothesis theoretical framework and uses the translog Stochastic Frontier profit function with one output (Loans), two inputs (price of funds and noninterest expense) and two netputs (fixed assets and equity) to formally examine the impact of the Global Financial Crisis on the profit efficiency of this bank. This study also employs the Multivariate Regression Analysis to examine the relationship between the profit efficiency of the bank and some contextual variables. To achieve this objective, the study uses the Ordinary Least Square to examine the potential determinants of the bank's Profit efficiency. The result of the translog profit function shows that the bank made a significant progress during the crisis period while that of the OLS shows that the Global Financial Crisis does not have a statistically significant impact on the profit efficiency of the bank. Looking at the other determinants of the profit efficiency of the bank, the result shows that variations in the dependent variable has been largely explained by the independent variable as shown by R-square of 0.9628. Also, total asset, bank's diversification, capital strength all have positive effect on the profit efficiency of the First Bank of Nigeria while Bank's loan intensity and the Gross Domestic Product have negative impact. The study concludes that Global Financial Crisis did not have impact on the efficiency of First Bank of Nigeria Plc. It is therefore essential that the regulatory and supervisory authorities (CBN and NDIC) formulate and implement monetary policies that are effective in helping the banks to improve their operations, thereby leading to efficiency in resource allocation and utilization.
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Hassan, Bello, Evans Osabuohien, Folorunso Ayadi, Jeremiah Ejemeyovwi, and Victoria Okafor. "Economic analysis of growth finance and liquid liabilities in Nigeria." Investment Management and Financial Innovations 17, no. 3 (October 8, 2020): 387–96. http://dx.doi.org/10.21511/imfi.17(3).2020.29.
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Liquid liabilities are required to develop key sectors that drive the Nigerian economy by ensuring that loans are available for investment purposes. However, controversies concerning the effectiveness of growth finance in fostering liquid liabilities in Nigeria exist. Thus, this study examines the relationship between growth finance and liquid liabilities in Nigeria, with insight into Nigeria’s real sector. In achieving its objective, the study utilizes secondary data from the annual reports of the Central Bank of Nigeria (1980–2018). The study finds that gross domestic savings significantly drive liquid liabilities in the long run compared to other growth finance indicators, which include stock market development and remittance inflows. Therefore, the study recommends that to improve liquid liability, gross domestic savings, among other growth finance indicators, should be harnessed as a tool to efficiently influence liquid liabilities in the Nigerian economy. The study concludes that attention should be paid to development policies that drive all stakeholders’ gross domestic savings.
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M. Obiageri, Ugwu-Oju, Vincent A. Onodugo, and Mbah, Paulinus Chigozie. "Assessing the Effectiveness of Commercial Bank Loans as Sources of Funding/ Capital Formation for Small and Medium Enterprises (SMEs) in Southeast, Nigeria." Business, Management and Economics Research, no. 54 (April 24, 2019): 62–70. http://dx.doi.org/10.32861/bmer.54.62.70.
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The paper assesses the effectiveness of commercial bank loans as sources of funding Small and Medium Enterprises (SMEs) in Southeast, Nigeria. A cross-sectional survey method wherein structured questionnaire was used to collect data was adopted. A sample of 500 respondents was randomly selected from the five industrial hubs in the five states of Southeast, namely Nnewi, Aba, Enugu, Abakiliki, and Owerri. With the aid of pecking order theory (POT)/hypothesis of Lending, percentage formula, and SPSS version 20.0 tools, the data generated from the respondents were analysed. Among others, the results of the analysis reveal that SMEs and commercial banks are highly indifferent to the loans facilities; strict collateral requirements, high interest rates, and the nature of requirements for guarantors dissuade SMEs from accessing loans; and government interventions provided palliative measures but failed to address the problems associated with the loans. Therefore, this paper recommends policy reforms to reduce interest rate, collateral and guarantor requirements. Further research on how to modernise and harmonise other external sources of SME funding such as ‘daily contribution’ and ‘Isusu’ systems is required.
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Isiorhovoja, Rodney Akpoviri. "Comparative Statistics on the Activities Agricultural Credit Guarantee Scheme Fund (ACGSF) Among Oil Producing States of Nigeria." Mediterranean Journal of Social Sciences 8, no. 1 (January 26, 2017): 105–9. http://dx.doi.org/10.5901/mjss.2017.v8n1p105.
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Abstract This paper reviewed the activities of the Agricultural Credit Guarantee Scheme Fund (ACGSF) in the Niger Delta Development Commission (NDDC) covered states for the period 1991 to 2011. The objectives were to compare variation in the number and value of loans guaranteed to these states and to determine the stability or otherwise of the relationship between number of loan beneficiaries and the value of loans guaranteed to beneficiaries with the introduction of the NDDC in 2000. The hypothesis was that the relationship between the value and number of loans guaranteed to farmers in these states under the ACGSF did not undergo structural change with the introduction of NDDC. Time series data were obtained from the Statistical bulletin of the Central Bank of Nigeria (CBN, 2011) for the period 1991 to 2011 on the total number and value of loans guaranteed. They were analyzed using descriptive statistics and inferential statistics, namely; ANOVA and Chow test. Among the findings were: that there was no significant variation in the number and value of loans guaranteed among the nine states in the period under review; that CV were particularly high in value of loans guaranteed for all the states and in both variables for Delta State; that number of loans guaranteed were under 1000 units for all the states in the period reviewed but the value of loan increased dramatically since 2004, thus farmers coverage was low and static; that the null hypothesis of no structural break was accepted for Akwa Ibom, Delta, Imo and Rivers States but rejected for Abia, Cross River, Edo and Ondo States. The conclusion was that ACGSF can do better. It was recommended that ACGSF should minimize variability in annual total value of loans disbursed and that there should be a closer institutional linkage between the financiers of ACGSF and NDDC to facilitate farmers maximization of the benefits from these two institutions.
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Adegboye, O. D. "THE LIQUIDITY AND PROFITABILITY TRADEOFF OF COMMERCIAL BANKS IN NIGERIA." Open Journal of Management Science (ISSN: 2734-2107) 2, no. 2 (August 25, 2021): 17–26. http://dx.doi.org/10.52417/ojms.v2i2.250.
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This study used empirical facts and assessed the trade-off of profitability versus liquidity (and vice versa) for five commercial banks in Nigeria. Multivariate research design, regression analysis, Ordinary Least Square, and correlation coefficient approaches were used to apply quantitative methodologies to data collected. Amongst the population of twenty-two banks, Zenith, First, United Bank for Africa, Guaranteed Trust and Union Banks were chosen as case studies for this study using a purposive sample approach. Secondary data was gathered from their five-year annual reports, which were published between 2015 and 2019. The correlation coefficient was employed to test the hypothesis, which revealed that there was a statistically perfect correlation (positive and negative) between LA (loans), BA (bank advances), and MDI (marketable debt instruments) against PAT (profit after tax) and ROA (return on assets). Furthermore, since banks strive to maintain their current assets, the findings revealed that efficient liquidity management is a key determinant that may boost or impair a bank’s profitability. To avoid future insolvency and bankruptcy, this study recommends that these banks use contemporary and effective liquidity management strategies amid the current post-pandemic environment. In addition, while focusing on the same topic of research, interested scholars should make significant use of a broader data coverage area.
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Adegboye, Alex, Stephen Ojeka, and Kofo Adegboye. "Corporate governance structure, Bank externalities and sensitivity of non-performing loans in Nigeria." Cogent Economics & Finance 8, no. 1 (January 1, 2020): 1816611. http://dx.doi.org/10.1080/23322039.2020.1816611.
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Obembe, Olufemi Bodunde, and Rosemary Olufunmilayo Soetan. "Competition, corporate governance and corporate performance." African Journal of Economic and Management Studies 6, no. 3 (September 7, 2015): 251–71. http://dx.doi.org/10.1108/ajems-02-2012-0007.
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Purpose – The purpose of this paper is to examine the nature of interactive effect of competition and corporate governance on productivity growth of firms in Nigeria. Studies that have considered this issue were mainly from developed countries possessing strong institutions as against those of developing countries like Nigeria. Moreover, studies from Nigeria have focused exclusively on corporate governance and firm performance. The interaction effect of competition on corporate governance is yet to be addressed in the context of Nigeria. Design/methodology/approach – The study adopts the dynamic panel data analysis approach suggested by Arellano and Bond for productivity growth analysis. Data on 76 non-financial firms for 11 years beginning from 1997 were extracted from the financial statements of companies collected from the Nigerian Stock Exchange and subsequently analysed using General Methods of Moments (GMM). Findings – The results show that competition had a positive impact on productivity growth, however, its interaction effect with corporate governance had a substitute but not significant impact on productivity growth. When competition was interacted with an alternative corporate governance mechanism – bank – a positive and significant impact was, however, observed which shows that competition and bank loans are complementary in stimulating productivity growth of firms in Nigeria. Research limitations/implications – The study could not be carried out beyond year 2007 owing to the exit of some firms after 2007 which could have reduced the sample size drastically. The findings emanating from this study suggests that government should focus much more on implementing competitive policies and bother less on writing corporate governance codes. Practical implications – The results demonstrate that corporate governance had no significant impact on productivity growth even when it was interacted with competition. However, competition on its own had a significant impact on productivity which means that Nigeria should concentrate more on building a competitive private sector, and in this regard, government should try and pursue policies that will foster competition and eliminate monopolistic tendencies. Once, there is effective competition, the corporate governance may be strengthened. However, the interactive effect of competition and bank loans was found with a positive and significant impact which indicates that banks as alternate corporate governance mechanism can only be effective if competition is strong. This goes to show that the financial sector may not be able to effectively and positively impact the real sector in Nigeria if the prevailing level of competition is low. In such a situation finance may not be channelled to projects that have long-run implications on sustainable growth and development. Social implications – Socially, if the environment for competition is not fostered in Nigeria, the country may face an uphill task in combating the problem of poverty through a private sector-led solution. Hence, there is a need for government to begin to formulate comprehensive competition policies that will ensure that resources are optimally utilized in Nigeria. Originality/value – In the context of Nigeria, this study is novel, the use of productivity growth as against firm financial performance is unique for Nigeria while the use of GMM method of analysis helps in reducing the effect of endogeneity inherent in corporate governance and performance of firms in Nigeria.
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F. O., Ifeanyieze, Nwachukwu C. U., Onah F. C., Mgbenka` R. N., Ekenta L. U., Nwankwo C. U., Onah Ogechukwu, et al. "Effect of Bank Holding Company Structure on Farmers’ Financial Welfare in Nigeria." Journal of Social Sciences Research, no. 512 (December 5, 2019): 1723–33. http://dx.doi.org/10.32861/jssr.512.1723.1733.
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This study examines the impact of bank holding structure on the financial welfare of farmers. We used an expost facto research design and studied all the 18 deposit money banks in Nigeria. We used dummy variable to measure bank conglomerate structure for the period between 2001 and 2018. We also identified the features of financial holding companies based on firms’ specific variables including portfolio condition, competitive standing, equity characteristics and sizes. Based on our analysis, bank holding structures significantly and positively affect banks’ propensity to create risk assets to farmers (coefficient=0.34; p-value less 5%). This implies that ring fencing banks leads to increase in credit availability to farmers and consequently their welfare advancement in Nigeria. Banks with holding structure have competitive advantage and this competiveness benefits farmers significantly (coefficient=0.05; p-value < 0.05). Our analysis also shows that banks with holding structures diversify into non-interest source of revenue, which yields positive and significant effect on farmers’ financial welfare (coefficient= 2.05). Thus, diversifying conglomerating banks can outperform their peers in terms of risk asset making for farmers to extent that relative to non conglomerate banks, up to 2.05% of credit is allocated to farmers for every unit change in bank market due to holding structures. Variation in deposit demands, and gross assets were found to advance loans to farmers. However, default risks and liquidity risk of conglomerate banks limits their credit availability to farmers, which implies that conglomerate banks are highly sensitive to liquidity and default risks. We also found that conglomerate banks allocates risks asset to farmers based on the national economic growth level. Thus, as the economy improves conglomerate banks’ desire to make risk assets to farmers also increases. We recommend that regulators should improve economic growth in order to draw banks into lending to farmers. Conglomerate banks should be protected from default shocks and liquidity risks in order to encourage them to lend more to farmers.
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Ugoani, John N. N., and Anthony Ugoani. "Business process reengineering and Nigerian banking system efficiency." Independent Journal of Management & Production 8, no. 4 (December 1, 2017): 1173. http://dx.doi.org/10.14807/ijmp.v8i4.549.
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Prior to 2000, and before banks in Nigeria embraced the NBS was inefficient, characterized by frauds, long queues, nonperforming loans, illiquidity and distress. As one way of overcoming these challenges banks started to focus on BPR as a veritable tool to drive efficiency customer satisfaction and improved shareholder value. With the advent of BPR and process improvement efficiency gradually strolled back in to the NBS Against the prereengineering era when the liquidity ratio of the NBS was minus 15.92 percent in 1996 with no bank meeting the 30 percent minimum prudential requirement, the NBS had a positive average liquidity ratio of 65.69 in 2011 with all the banks meeting the 30 percent minimum liquidity ratio. The banks that introduced BPR early in the 2000s have remained without distress, liquid, efficient with high growths in gross earnings, total assets profitability and total equity. The research design was deployed for the study, and it was found that BPR has positive effect on NBS efficiency.
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Udoka, Chris O., and Mary Kpataene. "MORTGAGE FINANCING AND HOUSING DEVELOPMENT IN NIGERIA." International Journal of Research -GRANTHAALAYAH 5, no. 5 (May 31, 2017): 182–206. http://dx.doi.org/10.29121/granthaalayah.v5.i5.2017.1850.
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This study examined mortgage financing and housing development in Nigeria. The main focus of this research was to ascertain the impact of mortgage loan in housing development in Nigeria. To achieve this objective, data were extracted from CBN statistical bulletin and National Bureau of Statistics from 1990 to 2014. Three hypotheses were formulated and tested using econometric models such as Augmented Dickey-Fuller unit root test, the co-integration tests revealed the existence of a long-run relationship among the variables. The Error Correction Model established causal links and dynamic interactions between variables by granger causality test. The result of the findings showed a significant relationship between mortgage financing and housing development in Nigeria. Variables such as mortgage loan and interest rate had positive and significant impact on housing development while cost of building had a negative effect on housing development in Nigeria. Further findings revealed that mortgage bank deposit had positive effect on mortgage investment while inflation had a negative effect on mortgage investment. The study recommended that mortgage institution in Nigeria should develop strategies to mobilize more deposits and explore new sources of fund such as funds from the capital market via housing bonds, savings and loans from co-operative societies. Government should create an enabling environment for private housing sector in housing development in Nigeria by providing infrastructure and enhancing soundness and competitiveness of mortgage institutions in Nigeria.
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Ayanda, I. F., and O. Ogunsekan. "Farmers’ Perception of Repayment of Loans Obtained from Bank of Agriculture, Ogun State, Nigeria." Journal of Agricultural Sciences 3, no. 1 (July 2012): 21–27. http://dx.doi.org/10.1080/09766898.2012.11884681.
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