THE ROLE OF FINANCIAL INSTITUTION IN A DEVELOPING ECONOMY
CHAPTER ONE
1.1 INTRODUCTION
The idea of establishing indigenous development financial institution was moved after the establishment of the Central Bank of Nigeria on first July, 1959 after the bank’s failure of the early 1950’s. During this time, it became obvious that there was an urgent need fro financial institution capable of providing medium and long term capital to full up serious gaps in the financial system/structure of the economy. As a result of this need, arose to create special institutions for special purpose, the special purpose being development in the widest sense of the term.
There was a need to create institution that could undertaken investment where the private investor, might for the time being also revetments to go, and create atmosphere in private investor where they will find the risk of investment considerably reduced if not wiped out entirely. The need is to stimulate the private sector of the economy and also with the promotion and finance of an enterprises by the provision of long-term and medium term finance was accepted.
1.2 STATEMENT OF THE PROBLEMS
1.2.1 MAJOR PROBLEMS
This research entitled “The Role of Financial Institution in a Developing Economy, attempted to determine find out the role of financial institution in enhancing the economy development of Nigeria with particular reference to some premise financial institutions like Nigeria Bank for Commerce and Industry can Nigeria Agricultural and Cooperative Bank.
1.2.2 SUB-PROBLEMS: THIS STUDY TRIED
i. to know the objective for their establishment
ii. the basis for the disbursement of their fund
iii. what problems instituted their effective operation performance
iv. areas of priority or special attention in the disbursement of funds
1.3 THE PURPOSE OF THE STUDY
The idea of establishing indigenous financial institution was rooted soon after the establishment of the Central bank of Nigeria on first July, 1959 after the bank failures of the early 1950’s. This study tried to ascertain has much of the above listed objectives to the financial institution have been able to achieve, their standing relationship with the industry and commerce which they are meant to fund. Their standing relationship with the Nigerian Public and the Central bank of Nigeria (CBN) which is their main source of fund.
1.4 SIGNIFICANCE OF THE STUDY
The idea of establishing indigenous financial institution saddled with the responsibilities of financing, funding industrialist and other Commercial Entrepreneurs fro the economic emancipation of the country is unique in such a way that it tried to x-ray the role of financial institution whose functions are to help in the bid to Lunch Nigeria into economic freedom and to enable her complete favourably with the international economy. This study reviewed the primary role of these institution which reviewed included among other numerous function “providing equity capital and funds by way or town to indigenous persons. This study is equally significant in the at it has reviewed the activities of the Nigeria. Institutions in trying to close those gaps created by the operation of the earlier existing non-development financial institution and speed up economic development of Nigeria.
1.5 SCOPE AND DELIMITATION
This research entitled. “The role of financial institution in a developing economy is very verse but for the purpose of manageability and financial constraints, it has therefore restricted or limited itself to some specific development financial institution in Anambra Urban. Some of these chosen indigenous financial institution include Nigeria Bank for Commerce and Industry, Nigeria Agricultural and Co-operative Bank and the Universal Insurance Company Limited.
1.6 DEFINITION OF THE TERM
i. Role: For the purpose of the research role should mean and includes all parts played and exhibited by financial institution in the development of Nigeria Economically.
ii. Development: It is constructed to mean here advancing to attain a higher economic state and improvement in the standard of living of the people.
iii. Financial Institution: It means and includes all these financial houses that are involved in the economic development of this nation.
iv. Economy: In this research, economy should referees to the improvement of the standard of living of the people. Wherever we come across a developing to the development of the people standard of living.
