EVALUATION
OF LIQUIDITY ASSETS MANAGEMENT IN FIRST BANK OF NIGERIA PLC
ABSTRACT
The language
of business is money, and money is the business of financial institutions. No
business be it large, medium or small – scale can survive without finance,
therefore. Financial institutions should try as much as possible to develop
their credit policies, as they are the target sources of finance available to
the small – scale enterprises. For many years the importance of small scale
industries Vis – a- vis their role in the economic development of Nigeria can
never be overemphasized, so their need for long – term finance increase.
Inspite of the government’s effort in assisting the development and strength of
small-scale industries, the assistance given by the financial institution still
remains inadequate. The major problem confronting small scale industries is as
a matter of fact constitute the second major sector in the Nigeria economy that
bears most of the burnt of the existing gap in the Nigeria financial system. It
is worth reiterating that one of the objectives of the federal and state
government is to achieve socio – economic development of the goal cannot be
achieve without the development of rural areas, the growth of small – scale
industries in the rural areas serves as one of the main vehicle of transforming
the nations and the subsequent enhancement of the socio economic growth of the
state. Indeed, it has been noted that, usually in programmes of social and
economic developments in the newly industrializing countries, small industries
play a vital role. Small – scale industries assist the government in creation
of employment opportunities, this reduces surplus labour. This tends to reduce
urban influx of employment labour. This sector has facilitated rapid expansion
and diversification in the industrial sector of the Nigeria economy. The sector
is diversified in that not only large industries are relied upon but also small
business and that the large industries fail. The small ones could be made to
produce and render the service required. It is worth nothing that though these
small-scale enterprises are small in nature, they have a definite function to
place in our economy. For the supply of raw materials and other inputs to the
large industries, small and medium enterprises all need to be unturned in the
hope that they can grow into large enterprises as new ones rise up to replace
them and the old ones continued in the process of economic growth and
development. For an objective analysis, interview and questionnaire have been
used as research instruments. The interviews were administered to some selected
small – scale industrialists. On the analysis it was found out that the role of
financial institution to the development of Small – scale industries in Nigeria
is inadequate. Consequently, the null hypothesis is accepted. Finally, some
useful recommendation as to improving the assistance of financial institutions
to small-scale businesses have been advanced.
TABLE OF CONTENTS
Title page
Declaration
Approval
Dedication
Acknowledgement
Abstract
Table of contents
CHAPTER
I
1.0 Introduction
1.1 Background
of the Study
1.2 Statement of the Problems
1.3 Objectives of the study
1.4 Research hypothesis/questions
1.5 Significance of the study
1.6 Scope of the study
1.7 Historical Background of Case Study
1.8 Definition of Terms
CHAPTER II
2.0 Literature
review
2.1 Organizational structure of the study
2.2 Historical Development of Nigeria Banking Sectors
2.3 Definition and Classification of Small – scale Industries
2.4 The Functions of Commercial Banks in the
Development of
Small – Scale Enterprises in Nigeria
2.5 Types of financing for Small – Scale enterprises
both banking
and non banking sectors
2.6 Sources of finance for small – scale enterprises
2.7 Problems of financing in small – scale industries
2.8 Capital market
CHAPTER III
3.0 Research
Methodology
3.1 Introduction
3.2 Population and sample size
3.3 Sampling techniques
3.4 Sources and methods of data collection
3.5 Methods of data analysis
3.6 Justification for the choice
CHAPTER IV
4.0 Data Presentation, Analysis and Interpretation
4.1 Introduction
4.2 Data Presentation
4.3 Data Analysis and Interpretation
4.4 Testing of Hypothesis/Questions and Interpretation
4.5 Summary of findings
CHAPTER V
5.0 Summary, Conclusion and Recommendation
5.1 Summary
5.2 Conclusion
5.3 Limitations of the Study
5.4 Recommendation
References/Bibliography
Appendix/Appendices
CHAPTER ONE
1.0 INTRODUCTION
Banks have been accused of taking two
much risk in unexpected new environments and lines of business. The advice
being given is for the banks to avoid further in exposure by threatening to
move tradition that will understand the activities banks, however are being
charged by their shareholders to maximize holder’s wealth overtime. To achieve
this goal, banks must search out for opportunity in the financial market and
loan to manage risk by implementing more systematic system of risk control. At
present it appears appropriate to develop specific management control mechanism
for each new risk element.
The system being
designed by bankers is in contrast one that allows each new form of risk to a
new element in an overall analytic area of banks. This approach requires an
informational environment that enables risk managers to analyze all of the risk
inherent in a given transaction.
1.1 BACKGROUND
OF THE STUDY
The aim of this project writing is to
bring out the way in which liquidity asset is managed in Nigeria banks. Most
especially first bank Yabubu Gowon Way Kaduna is my case study and the kind of
services offered by first banks in the management of liquidity.
The banks engaged in
the business of providing adequate service, which are:
i.
Universal
banking services to corporate bodies
ii.
Loans
and advances to its customer
iii.
Leases.
iv.
Investment
Banking services
v.
Financial
Advisory services to corporate bodies
vi.
Foreign
exchange services.
1.2 STATEMENT OF THE PROBLEMS
First bank Nigeria Plc is expected like
all other banks to provide quick and efficient services to both customers and
interested parties. The banks should know the value of time and try as much as
possible to serve its customers in the shortest possible time. This is because,
the customers are the business of the bank and that is why they are regarded as
assets of the cast and other valuable things deposited to them by its
customers. This why each and every paper in the bank is considered as money
because it talks about it. One of the functions of banks is to grant loan to
customer, so as to assist them to undertake various projects for the
development of economic activities in the country. In this aspect both the
customers and the bank have the same aim that is to make profit. In other
words, to achieve this aims the bank and customers have to perform their duties
for the smooth running of the system. In most cases the two side always make
things difficult for one another on the part of the honest and firm so as allow
the bank form a good reputation and develop good banker – customer
relationship.
On the other hand the
banking industry is expected under normal circumstances to bring out its
activities not only efficiently but also accurately. But this is almost
apposite and has led to in looking at the problems of the customers in the
banks, it can be seen that the blame is on both sides. Some of these problems
are
i.
Opening
Account: Accounts are
opened by the procedure laid down by the customer who thinks it’s a waste of
time don’t know that the banks has to be careful on this sensitive issue. When
opening the account that all necessary data is collected from the customer
which is be used in payment and all other future transaction.
ii.
Cash
Withdrawal: In this,
banker has to satisfy himself with the validity of the charges or withdrawal
slip (in case of saving account). This can take time which the customer may fee
he/she is wasting time. Since it is the duty of the bank is to safe guard all
cash under its custody satisfaction is very much necessary.
iii.
Obtaining
Loan from the Bank:
It is clean principle and natural justices that loan should only by granted
with security and the security has to be sufficient enough to cover the debt.
In most cases customer ignores the
1.3 OBJECTIVE OF THE STUDY
The purpose of this study is to
efficiently and liquidity can be evaluated efficiently and effectively in
Nigerian banks in order to guide against bankruptcy: It is also aimed at
affecting a concrete control to consumer borrowing of limited resources
available to the banks in order to guide against bankruptcy.
It is also aimed at
affecting a concrete control to customer borrowing from the bank and efficient
management of limited resources available to the bank the management and
control.
i.
From
the bank to other parties at the request of customer.
ii.
From
customers to the banks
iii.
From
the bank to the customers
iv.
To
and from other banks including the central bank of Nigeria.
1.4 RESEARCH HYPOTHESIS
As a starting point for the research
work the following hypothesis were developed.
Ho: Evaluation of liquidity management in
Nigerian banks has always been without problems.
Hi: Evaluation of liquidity management in
Nigerian banks has not always been without problems.
1.5 SIGNIFICANCE OF THE STUDY
The purpose of this research work is to
accomplish the following.
i.
To
ascertain the level of risk in liquidity assets management and how such risk
could be eradicated. This project hopefully would be beneficial to the
management of First Bank Plc, as well as other Nigerian banks
ii.
To
partially fulfill the requirement for the award of national diploma in
accountancy
iii.
This
project will serve as a basis for further research on this topic
1.6 SCOPE AND LIMITATION OF THE STUDY
All banks and other financial
institutional deal in liquidity hence managing liquidity: however this study
will concentrate on how Nigeria banks managed liquidity with particular
emphasis on first bank Plc. Yakubu Gowon way branch as a case study.
i.
Uneasy
access to the bank relevant document
ii.
Insufficient
time due to short period available for the study and during the project
writing.