FEDERAL UNIVERSITY OF KASHERE, GOMBE STATE.

FACULTY OF MANAGEMENT SCIENCES

ACCOUNTING DEPARTMENT
P.M.B 0182

Course Code: ACC 3210

Course Title: RESEARCH METHODOLOGY

Matric Number: FUKU/HMSS/19/ACC/0183

Names: Onuh Sunday Oche

ASSIGNMENT;
THE ROLE OF FINANCIAL INSTITUTION IN
THE DEVELOPMENT OF NIGERIA
ECONOMY

Course Lecturer: DR. UMALE OKOH

INTRODUCTION

1.0 BACKGROUND OF THE STUDY

The historical background of these financial institution is mode of operation which is

an important aspect of this study. By their historical background. We can now know the aims
purpose, objectives of these financial institution in our economy. In 1 st July 1959, the first
central bank of Nigeria (C.B.N) which was the apere bank that control other financial
institution in the country was established. Commercial bank is the oldest of all banking
institutional in Nigeria, it dates back to 1892 when. It was known as the bank of British West
Africa (Now First bank of Nigeria) was established. This was followed in 1917 by the
Barchys bank (Dominidu, colonia and overseas) (DCO) (Now union bank in 1933. the first
successful Indigenous commercial bank was named National bank of Nigeria was established
in 1948. African continental bank (ACB) was established by 1960 at independent, these were
(12) twelve banks operating in the country with a total number of 160 offices and branches
scattered in different locations of the country.

Many specialized credit instutitons have in the past two and half decades developed. These
includes the Nigeria Merchant banks, Nigeria industrial development bank (NIDB) Nigeria
bank for commerce and industry (NACB) established 1973 and restructured in the 1978 to
include the finance of co-operative bank established in the federal mortgage bank of Nigeria
constitution in July, 1977, merchant banks then are relatively new business which were trance
to 1960 when Selected financial institutions in Enugu was established. The Non-bank
financial institution includes finance companies, the oldest finance Ltd was established in
1959.

Then insurance companies, then first insurance companies were 1921 and was named Royal
exchange Assurance company, investment companies unit trust, co-operative societies which
have its foundation from the establishment of co-operative stores in 1844 in Britain, its origin
in Nigeria banks to the eighteen (18 th) century Bureax De change which was establish in 1989
though the decree that the same your and persen provident fund.
 It is the desire of all these financial institutions to to create an impact on the Nigeria
economy. Also the citizen’s expectant from all these financial institution is to see the roles
played by these financial institution in our present economic situations.

1.2 STATEMENT OF THE PROBLEM

In view of the development of the Nigeria Economy, there are bedeviled practices
which disturbs financial institutions in carrying out their roles for the growth of the
economy. Those practices are as fellows below:

(1) Lack of ability to supply funds (Loan) to the small scales industries (Business)
(2) The inability to offer interest yielding financial instruments.
(3) The inability to effectively manger the financial aspect of the economy.
1.3 RESEARCH QUESTION
(i) Does financial institution (Banks) engage themselves in activities that help to
develop the economy?
(ii) Does the banks regulation have any effect on the roles of financial institution as
they play in the economy?
(iii) Does long-term borrowing affect the role of financial institution in the
development of the Nigeria Economy?
(iv) Is the contribution of financial funds to banks enough to be felt at well as
stimulating the economy?
1.4 OBJECTIVES OF THE STUDY
The objectives of the study is to find out whether the role is improving the growth and
development of Nigeria economy is being played efficiently and effectively and those
things that gives distress in the system. Another objective was to know or X-ray what
the government is doing to maintain any financial institution in the development of the
Nigeria Economy like Nigeria and solve the problem if any and also solved the problem
of low productivity. And unemployment in the economy at large. And also in partial
fulfillment of my national diploma (ND)
1.5 RESEARCH HYPOTHESIS
The oxford advanced learners dictionary defined hypothesis as suggestion or idea the
is based on know facts and is used as basis for reasoning or further investigation. For
the purpose of this study, the hypothesis shall be analyzed in order to prove their level
of rejections and acceptance. These are hypothesis which were used.

Ho: There is no significant relationship between financial institutions and economic

development.

Hi: There is significant relationship between financial Institution and economic

development.

Ho: There is no significant relationship between financial institutions and

implementation of government policies

Hi: There is a significant relationship between financial institutions and

implementation of government policies

1.6 SIGNIFICANCE OF THE STUDY:

The research project is more important to the financial institutions and department of
the central bank of Nigeria, various commercial banks in Nigeria and it will also serve
as readable material for further research.

It is necessary for lectures (Teachers) and workers in relation to this study. It is

important to student taking courses in accountant, banking and finance and economics
to have modern approach to the teaching and understanding the financial institutions
in which they will find interest in.

1.7 SCOPE OF THE STUDY

The research project is designed to cover the roles of financial institutions in the
development of the economy. It shall cover both the present and past period of financial
institutions in Nigeria. For easier collection of data some banks particularly
commercial banks will be examined for the research.
1.8 LIMITATIONS OF THE STUDY
Besides times and financial constraints, some other factors that militated against this
research topic includes:

1. Lack of books: The scope of its work was electively affected because of scarcity of
books in the relevant areas.

2. Attitude constraints: In the case of the questionnaire, some blatantly refused to

collect it to gill while those that collected tool a lot of time to fill the required
answers. Some fill them haphazardly.

3 Bureautic constraints: Under this limitation concrete attempt made to interview or

reach top official failed because of redtaptism in running official engagements and
procedures in releasing the official or secret of the company.

SOURCED ARTICLES IN RESPECT TO THE TOPICS

S/N NAME OF OBJECTIVE METH FINDINGS GAP

O AUTHOR ODOLO
GY
1. NWACHUK To find out The Chi There is Due to the
WU FAVOUR whether the role of square relationship dynamic nature of
.C. (2017) financial method between our environment it
institutions is was used financial is therefore
improving the to test institution and imperative that
growth and data. implementation banks (Financial
development of of government institution) should
Nigeria economy, policies. undertake research
to know what the in order to know
government doing exactly what are
to maintain or the roles to play by
 encourage the them in the
financial development of
institutions in the our country’s
development of economy which
the Nigeria were depressed
Economy. now.
2. to spot light the The There was a
James Ese roles of financial analytica concrete Lack of
Ighoroje & institutions in the l tool conclusion that Government
Henry Egedi development of used is lending to the regulatory
(2015) the Nigeria the real and authorities
economy and to ordinary productive checking the side
provide quality least sector of the effect of policies
recommendations square economy has formulated before
on how this [OLS]. been a major implementation
institutions can be contribution of
managed to ensure financial
economic institution and
development. this has led to a
significant
increase in
investment and
production
which has
further affected
the total output
of the country
significantly
despite some
 lags or
loopholes
3. Olayemi This study The there is the The low capital
Samson attempted to Ordinary need to base, dominance of
Sennuga analyze the Least adequately a few banks, over-
(2021) relationship Square deepen the dependence on
between financial (OLS) financial public sector
development and Regressi system through deposits and weak
economic growth on innovations, corporate
in Nigeria using model is adequate and governance among
data on annual used to effective others have
growth of the obtain regulation and necessitated
gross domestic the supervision, financial sector
product, real paramete efficient reforms in the last
interest rate, the r of the mobilization of few years
ratio of gross variables funds and
domestic savings . making such
to GDP and ratio funds available
of domestic credit for productive
to private sector to investment,
GDP. and improved
services.
4. HASHIM, to demonstrate the Qualitati Lack of There is serious
Yusuf Alhaji relationship ve times consistent causality between
(2022) between financial series relationship financial
development and was used between development and
economic growth to financial economic growth
in Nigeria. The generate system in Nigeria.
specific objective data to
 of the study is to obtain development
discuss the the and economic
determinants of paramete growth in
financial rs of the Nigeria
development. variables
5. The purpose of regressio
Ndugbu this study is to n The activities Finance companies
Michael O. investigate the analysis of bank and should make
(Phd), impact of Bank based on non-bank efforts in
J.N and non-bank the financial enlightening the
Ojiegbe(Phd) financial classical institution public on their
(2015) institutions on the linear substantially financial activities
growth and regressio influence the and create
development of n model growth and awareness on their
the Nigerian otherwis development of relevance.
economy. e known Nigerian
Determine the as economy.
impact of loans Ordinary
and advances of Least
Deposit Money Square
Banks on the (OLS)
growth and techniqu
development of e is
the Nigerian chosen
economy
6. Md. To see the Annual Financial Failure in the
Qamruzzama importance of time innovation government in
n (2017) financial series constitutes the enforcing financial
innovation to innovation in the
growth and introduction financial system,
economy of any and especially at
nation. promotion of financial
the financial institutions, so that
system by access to financial
offering better services can easily
and improved provide for
financial equitable
products, development
services, and
new processes
that establish
interactions
with customers
and assist in
the creation of
a new financial
structure for
financial
development,
which
eventually
expedites
a sustainable
economic
development
program.
7. Ajuwon The financial Regressi economic Emphasis on the
Kehinde system plays a key on policy is overall growth of
David (2018) role in the analysis important to the financial
mobilization and based on Nigeria’s system with
allocation of the economic reduced transaction
savings for classical recovery and cost, rather than
productive, linear transition into focusing on any of
provision of regressio a competitive the structures as
structures for n model market both impact in a
monetary otherwis economy. similar way on the
management, and e known policy overall
serves as the as direction economy.
basis for Ordinary should
managing liquidity Least emphasise the
in the system. The Square overall growth
paper examines (OLS) of the financial
the importance of techniqu system with
financial e is reduced
institutions to the chosen transaction
economic and also cost, rather
development of qualitati than focusing
Nigeria. It ve on any of the
discusses the preposito structures as
financial reforms ns were both impact in
in Nigeria and also a similar way
how the reforms useed to on the overall
have impacted formulat economy.
positively on the e
variables
 financial for this
institutions. paper.
8. Olokoyo O. F., To establish the The The financial Failures of
Taiwo N., underlying factors survey service has financial institution
(2017) of banks activities method been constantly seeking enhanced
that influence was used changing in its cooperation among
economic growth. using the operational one another and the
non environment regulators and
probabili which includes supervisors on the
ty competition other hand.
sampling between staffs,
method finding out new
and technology,
SPSS to globalization
generate and merger of
frequenc banks and so
y on.
percenta
ge.
9. Mustapha evaluating the The Nigerian Development of
Tafida Aminu, contribution of the methodo money New Money
Luka money market to logy market Market
Mohammed the economic used in contributes Instruments,
Bambur growth of the the immensely to Savings
(2017) country and to research the economic Mobilization.
ascertaining the was growth of
impact of money ordinary Nigeria. The
market in financial least Nigerian
square
 development in method money market
Nigeria. (OLS) has been
which is providing the
quantitat needed short-
ive in term fund in
nature. the economy.
It was also
found that not
all the money
market
instruments
considered in
the analysis are
active and
impact
significantly on
the gross
domestic
product of
the country.
10. Panicos To examine the The For poor it does appear to be
Demetriades, performance methodo countries, the case that the
Siong Hook between the logy improvements interaction between
Law (2006) intermediaries of used in in institutions financial
Finance, the are likely to development and
Institutions and research deliver much institutional
growth was larger direct quality, a variable
particularly in ordinary effects on that has been
allocating least economic neglected by
resources to square development previous studies, is
productive uses. method than finance on very important in
(OLS) its own. Our terms of economic
which is findings also development at all
quantitat suggest that stages of
ive in financial development.
nature. development is Thus, ‘better
most potent in finance, more
delivering real growth’ seems to
economic be a much more
benefits in widely applicable
middle-income proposition than
countries. ‘more finance,
more growth’
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