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AN EVALUATION OF THE ROLE OF POS BUSINESS IN EMPLOYMENT GENERATION IN NIGERIA

CHAPITER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

A point of sale, sometimes referred to as a point of purchase, is a device that enables debit cardholders in a given area to withdraw cash and make purchases.

When customers use their ATM cards to purchase goods or services, this machine is typically employed in retail establishments. A POS device is frequently used to pay utility bills, such as those for electricity, airtime, cable, or decoder subscriptions.

Therefore, the introduction of POS into the Nigerian economy has enhanced the convenience of doing business without having to carry significant sums of cash in one’s pocket, especially with the expanding use of modern electronic technology for e-funds around the world.

In order to advance its cashless policy and enhance the payment system, the Central Bank of Nigeria (CBN) introduced the usage of POS terminals for financial transactions in Nigeria in 2012. Since the program’s launch, banks have been giving mobile money merchants a growing number of active POS terminals.

This was brought on by society’s acceptance of POS transactions. Most Nigerians, however, who were desperately looking for a job chance and a regular source of income, looked into this prospect (Carlos 2014).

Despite Nigeria’s crippled economy and intolerable unemployment rate, the need to survive led to an astonishing rise in the number of money merchants or point-of-sale (POS) businesses operating there because the opportunity was seen as a potentially lucrative business and employment opportunity.

According to traces, banks registered 17,193 POS terminals for use in cashless transactions in Nigeria during the first three months of 2018 (Ogunfuwa, 2018).

According to statistics from the Nigeria Inter-Bank Settlement Scheeme (NIBSS), there were 164,607 active POS terminals in Nigeria as of 2018.

This information demonstrates that there has been a significant increase in the number of money markets and point-of-sale firms in Nigeria. As a result, the focus of this study is on evaluating the effect that POS has on creating jobs in Nigeria.

1.2 STATEMENT OF THE PROBLEM

One of Nigeria’s primary developmental challenges at the time is unemployment. There has never been a period in Nigeria’s history when unemployment has not been an issue,

according to records from numerous local and international organisations that are now available. This is despite data showing that the 1980s saw a high level of unemployment.

In Nigeria, both youth and non-youth unemployment rates have been rising along with the number of graduates from educational institutions.According to the International Labour Organization’s (ILO) definition of unemployment,

which the Nigerian National Bureau of Statistics (NBS) (2017) inferred, the unemployed population consists of those who are in the labour force, or people of working age, that is, between the ages of 15 and 64, and who were willing and actively looking for work but were unable to find for at least 20 hours (NBS, 2017).

However, Nigeria’s unemployment has gotten worse as a result of the recession’s escalating pace. This has caused widespread squalor and poverty among the populace.

But ultimately, the adoption and accessibility of POS in Nigeria has made people happy and given many unemployed Nigerians alternatives for employment. Because of this, there has been a rise in the number of people starting POS businesses and owning 2, 3, and more POS company outlets, hiring staff to run the outlets.

1.3 PURPOSE OF THE STUDY

This research epistle’s main goal is to assess the contribution of Nigeria’s POS industry to job creation. Regarding the aforementioned, the following are the precise goals:

Look at if the POS business is a successful endeavour for unemployed Nigerians.

Examine whether the development of POS in Nigeria has provided job opportunities for the country’s unemployed.

Consider the extent to which the availability and use of POS have provided POS business centre operators with a stream of income.

1.4 RESEARCH QUESTIONS

Is the POS industry profitable for Nigerians who are jobless?

Has Nigeria’s POS industry provided job opportunities for the country’s unemployed?

How much of a revenue stream has the use and availability of POS provided for the owners of POS business centres?

1.5 RELATIONSHIP TO OTHER STUDIES

The results of this study, which examines how the banking industry’s use of POS has given many initially unemployed Nigerians a chance to find work and eased the strain of unemployment in the nation, would be of enormous importance to the banking industry.

Additionally, this study will be a source of knowledge for students, professors, lecturers, and researchers who may likely do a study similar to this one.

1.6 SCOPE OF THE STUDY

The study’s scope is constrained to;

determining whether the creation of POS in Nigeria has provided unemployed Nigerians with a means of finding work, determining the extent to which the availability and use of POS have contributed to the financial well-being of POS business centre owners, and so forth.

As a result, the respondents to this survey will only include POS business owners in Warri, Delta State, Nigeria.

1.7 LIMITATIONS

The main drawback of this research is time limitations, among others, because the author had little time to complete it. Significant limiting elements in this research included budgetary restrictions and linguistic problems, in particular.

1.8 DEFINITION OF TERMS

Business: The term “business” also describes coordinated individual efforts and activities that manufacture and market goods and services for a profit.

Point of sale is referred to as POS. When a customer purchases a good or service, a point-of-sale (POS) transaction occurs between the merchant and the customer, typically using a point-of-sale system to complete the transaction.

A POS system is often used by retailers to complete a sale. In addition, it provides a variety of other banking services, including cash deposit, cash transfer, and cash withdrawal.

A relationship between two parties known as “employment” is one that is typically based on a contract and in which work is compensated.

In an employment relationship, one party—which could be a business, a for-profit or non-profit organisation, a co-operative, or another entity—is the employer, while the other is the employee.

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CRITICAL INVESTIGATION OF THE EFFECT OF COVID-19 LOCKDOWN AND POS WITHDRAWAL CHARGES IN LAGOS STATE

CHAPITER 1

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In Wuhan, China, COVID-19 was found in December 2019. However, it spread quickly and had a detrimental effect on all nations and territories worldwide.

As of October 5, 2020, there had been more than 6 million COVID-19 cases reported globally, with more than 1,000,000 deaths (Johns Hopkins University, 2020; WHO) (2020). These staggering numbers made the pandemic a major global health concern in recent times.

The disease does not discriminate against people based on their age, sex, gender, colour, ethnicity, social status, or other social characteristics, according to health researchers (WHO, 2020).

On the other side, it is thought that those who are older, come from low-income families, are of Native American descent, or have immunological or infectious diseases are more susceptible to the pandemic (WHO, 2020).

On February 27, 2020, an Italian citizen travelling to Nigeria tested positive for the virus, which is brought on by the SARS-CoV-2 virus. In Ewekoro, Ogun State, on March 9, 2020,

a Nigerian national who had contact with the Italian index case reported a second case of the virus. Nigeria is one of the nations experiencing a health catastrophe as a result of the COVID-19 virus’s global expansion.

The Federal Government, along with state governments, instituted a lockdown in Lagos, Abuja, and Ogun to stop the spread of COVID-19. Later, the lockdown was extended to other areas of the nation. As a result, nearly every aspect of the economy has been impacted, causing the movement of people and goods to be restricted,

schools to close, social and religious activities to be outlawed, and offices to close. The most distressing was that they had basic financial demands that could only be met with the assistance of banking services.

The only option that could be adopted during this time seemed to be mobile banking, one of the main commercial banks’ services, which supports several transactional features through the availability of smart phones, POS systems, etc.

People were able to withdraw money, make cash deposits and transfers, and other things thanks to the presence of POS along the roadsides. However, the lockdown that was imposed in Nigeria restricted POS businesses’ ability to operate, which led to a shortage of withdrawal points and other banking services.

However, the few POS operators in Lagos State, Nigeria, charged an unusual service fee in exchange for their services. In light of this, the purpose of this study is to ascertain how the Covid-19 lockdown and POS withdrawal fees have affected Lagos State, Nigeria.

1.2 STATEMENT OF THE PROBLEM

The Nigerian government’s implementation of the lockdown Covid-19 preventive step was praised as a wise choice to stop the virus from spreading throughout Nigeria. However, it had an unpleasant impact on the residents’ social and personal well-being.

The most intolerable situation was when people had regular financial needs that could only be met with the help of financial services but were unable to move around freely and even had access to banks.

People were able to conduct cashless transactions and other financial operations thanks to POS’s accessibility. However, the imposed lockdown in Nigeria limited the operations of POS companies, leading to a lack of withdrawal points and other banking services. However, as a result of this, the few POS providers in Lagos State tacked on an odd service charge.

1.3 OBJECTIVES OF THE STUDY

The researcher created the following goals to complete this study:

Examine whether the Covid-19 outbreak had an impact on the POS’s accessibility in Lagos State.

Check to see if the Covid-19 lockout precautionary measure implemented in Lagos State, Nigeria, led to the customary increase in POS prices.

Examine whether the Covid-19 lockdown and the POS charges impacted the residents’ access to funds.

1.4 RESEARCH QUESTIONS

Did the Covid-19 outbreak have an impact on the POS’s accessibility in Lagos State?

Has the typical price increase of POS charges been caused by the Covid-19 shutdown preventive action implemented in Lagos State, Nigeria?

Did the Covid-19 lockout and POS fees influence Lagos State residents’ access to funds?

1.5 RELATIONSHIP TO OTHER STUDIES

The Lagos State Government and the federal government of Nigeria will benefit greatly from and learn a great deal from this study on the impact of the COVID-19 lockdown and POS withdrawal charges in Lagos State because it will highlight the necessity of taking into account the welfare of its citizens and making adequate provisions when enacting drastic social changes.

Additionally, this study will be helpful to students, researchers, etc. who may likely conduct a research article similar to the one under review in their respective fields of study.

1.6 SCOPE OF THE STUDY

The study looked into how the Covid-19 outbreak affected the availability of POS in Lagos State, whether the Covid-19 lockdown preventive measure imposed in Lagos State,

Nigeria, led to the usual price hike of POS charges, and whether the Covid-19 lockdown and POS charges had an impact on residents’ access to funds.

Residents of Ikeja, Lagos State, Nigeria will be asked to respond to questionnaires for this study.

1.7 LIMITATIONS OF THE STUDY

The main limitations of this study are the language barriers, the respondents’ attitudes, the financial limitations, and the limited time the researcher had to complete the study.

1.9 DEFINITION OF TERMS

The severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) is the cause of Covid-19, also known as the coronavirus and COVID.

Lockdown: A lockdown is a limitation policy that forces a community or group of individuals to remain in one place, typically because moving around and interacting freely poses specific threats to them or to others.

When a lockdown affects an entire area rather than a single facility, the terms “stay-at-home” or “shelter-in-place” are frequently employed.

POS: The time and location at which a retail transaction is completed are referred to as the point of sale (POS) or point of purchase (POP).

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EFFECT OF COMMUNITY BANKS IN RURAL DEVELOPMENT

CHAPITER 1

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Nigeria’s development of community banking followed the president’s 1990 speech on the budget.
As a result, the first community bank was founded in Kaduna State’s Alheri Local Government Area in December 1990.

According to the definition, a community bank is a bank for the community that is exclusively designed for the growth of the rural community.

The bank functions as a rural development bank in this sense. In addition, it is a self-supporting financial organisation that a community or set of communities owns and manages to offer financial services to that community.

The community banks implementation committee will only consider proposals for community banks that have a minimum equity share capital of N250, 000.

Community banks were founded primarily to support profitable endeavours, particularly in rural areas.
They are designed to make it simpler for rural producers to acquire loans, which will help the Directorate of Foods, Roads, and Rural Infrastructure’s activities run more smoothly.

The Directors of community banks would therefore be required to take a very special interest in learning about, comprehending, and encouraging their clients to increase their productive potential by participating in these activities.

Our experience with rural development has demonstrated, in part, that efforts to strengthen the rural area’s economic foundation are constantly hampered by a lack of and limited access to loanable capital.

The previous administration’s economic strategies had depended on orthodox banks’ rural branches and development banking to solve this issue.

However, it was noted that conventional banks’ sophisticated methods of operation, legalistic insistence on collaterals, and extremely constrained geographic coverage made them insufficient or unable to serve the less-privileged and technologically-advanced members of our society who live in rural areas.

The Babangida administration came up with other, more suitable means of delivering credit as a result of the banking institutions’ disappointing results, leading to the creation of community banking in 1990.

It became a unit banking institution thanks to the law establishing community banks. This signifies that it is against the law to share branches. Community banks offer full banking services, with the exception of restricted foreign exchange transactions.

Additionally, it is only available to smaller financial institutions.
In fact, impoverished, rural, and urban residents’ informal credit systems were controlled by rotating savings and credit associations, or “Isusu,” which also served as a sound foundation for community banks.

Although it may serve as a sound foundation for the development of a rural banking system, the “Isusu” was cumbersome and imprecise. Community banks were designed to take the role of this and teach rural residents disciplined banking practises.

The community banks were hesitant to open branches in rural areas, presumably due to a lack of basic utilities, in addition to the underdeveloped and naive banking habits of the general public.

This non-developmental approach by commercial banks was what inspired the government’s strategy on rural banking initiatives.

The projects required traditional banks to offer rural banking. The purpose of this plan was to force traditional banks to establish offices in developing rural areas.

Economic development refers to the process of enhancing a nation’s wealth or the wealth of its subgroups, such as by raising food output, etc. At the current stage of our growth,

projects and programmes cannot make any substantial progress or impact unless they focus on those overall areas, therefore the change of attention to grass root development is a matter of need.

If not, the masses of people who live in rural poverty will continue to be a burden on the government’s efforts to promote development. In other words, it is crucial that we help the low-income rural population. if society is to experience real economic change.

Therefore, regardless of the extent of that desire, the government intends and desires that every Nigerian who is involved in a productive economic activity have access to loanable funds.
Community banking was established to fill the gap between the traditional banking system and the people’s bank.

1.2 STATEMENT OF THE PROBLEM
Even though the government is making a lot of effort to formulate policies that are intended to improve the economic situation of rural residents, there are some things that work against it.

The goal of community banking is to support rural community development, however from an operational perspective, community banks make little to no effort in this direction.

Customers are given money by commercial banks, and community banks do the same by requesting collateral from them. However, not all people who live in rural areas can afford to put up collateral in exchange for a loan facility.

This bank lacks the necessary capital to satisfy a tenable operational standard since it lacks the same level of banking expertise as foreign banks and is therefore unable to do so.

Due to this insufficient capital, loans can be granted to rural residents insufficiently. People don’t save much, thus there isn’t much money to deposit in banks, which causes extra issues for community banks.

Rural residents believe that banks are just for the wealthy and elite members of society, despite the fact that community banks have trained personnel on staff who can provide the rural population with accurate banking information.

The following statement of difficulties must be given weight for the purposes of this study:

How may rural borrowers acquire loanable cash to expand their economic activities?

ii. Other than requesting actual security, which rural residents would not be able to offer, how else might the loans be secured?

iii. What changes may be made to rural banking practises to promote rural development?

1.3 OBJECTIVES OF THE STUDY
Examining the role of community banks in rural development through a case study of Uli Community Bank in Anambra State’s Ihiala Local Government Area is the main goal of this study.

In addition to this main goal, the study would ascertain whether

(a) Community banks actually carry out their responsibilities, which include providing financial services to rural populations.

(b) Community banks educate rural residents about banking practises, closing the credit gap in their communities.
How may loans be secured without requesting tangible collateral?

(c) The availability of loans has decreased the rate of rural to urban migration.

(d) The availability of loans to rural residents has any impact on the level of employment?

The amount of loans that are available for borrowing depends on how rural residents feel about using public funds.

(e) Community banks are carrying out their command/development performances in terms of raising savings and funding economic growth.

1.4 SIGNIFICANCE OF THE STUDY
This study will go a long way towards outlining the appropriate functions of community banks in their respective fields of operation. As a result, in Nigeria, the community development/association is seen as the main proponent of a community bank.

Since community banks are relied upon by the poor, it is hoped that the findings of this study will encourage them to increase their efforts and aid in carrying out their duties successfully.

In fact, when discussing community banking, it should be clearly understood by the general public as a tool for grassroots development and a way to instill sound banking practises among rural residents.

Otherwise, the goal of community banking, which is to mobilise savings and finance economic activity, will be hampered.
However, it is important for us to understand how community banks affect rural development.

1.5 RESEARCH QUESTIONS
1. Has the introduction of community banks helped rural residents develop banking habits?

2. Does the collateral issue limit the expansion of economic activity in rural areas?

3. Is there general work at Uli Community Bank near where she lives?

4. In what ways are Community Banks Limited in their ability to serve those who live in rural areas?

1.6 SCOPE OF THE STUDY
This study’s focus is on the role community banks play in rural development, and it takes a close look at how rural residents can obtain loanable funds.

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ADVERTISING AS AN EFFECTIVE PROMOTIONAL TOOL IN THE DELIVERING OF BANKING SERVICE

A SHORT DESCRIPTION OF ADVERTISING AS A EFFECTIVE PROMOTIONAL TOOL FOR BANKING SERVICE DELIVERY

The purpose of this study, “Advertising as an Effective Promotional Tool in the Delivery of Banking Services,” is to attempt to provide an answer to the fundamental question that has been nagging researchers’ minds regarding how cooperative advertising functions as an effective promotional tool in the marketing of banking services, their value, and importance.

The basic introduction to the study, its background and analysis, the research topic and, most crucially, the definition of words are covered in Chapter 1.

The study’s second chapter covers some challenging viewpoints in depth, including a literature analysis, observations, and economists’ opinions on the efficacy of cooperative advertising.

The third chapter discusses the research study’s technique of operation. the survey method, design, sample size, and population to be used in the study. The results of data analysis are covered in chapter four. Chapter five presents a summary of the research and offers suggestions.

INTRODUCTION

CHAPTER ONE

1. 1 BACKGROUND OF THE STUDY

Business is like riding a bicycle; you either keep going or you crash. Man has made great progress over the past century, but one thing that makes him fearful is his capacity to connect the entire world via an invisible line known as communication.

Without communication, we would completely lack the coordination we have today. Communication in the prehistoric era was haphazard and crude, but as time went on, it became more and more important to have a better organised and established method of communication.

The importance of communication in marketing cannot be overstated. The success of such an attempt may not be desired if a company develops the ideal product or services, prices them attractively, and makes the model available to the target clients.

Marketing is used to accomplish these goals, and a variety of tools are used to meet the firm’s communication goals, including advertising, sale promotion, personal selling, and publicity. These tools have all been used by businesses in marketing communications,

but advertising is frequently used because it reaches a much larger audience than any other tool would typically reach. According to Cyman (1969), advertising’s main goal is to inform potential customers about a product or service and the businesses that manufacture it.

Banks offer their clients a variety of services. Due to the financial nature of banking services, it is important to inform customers about these services,

their advantages, and any new features. Additionally, banks must develop a respectable reputation for ability and viability through cooperative promotion.

clients should be more willing to do business with banks when there is a confidence response, thus a bank should regularly update its clients (both existing and potential) about its services and itself in order to establish a reputation.

1.2 STATEMENT OF THE PROBLEM

The trust of customers is kept safe by banks. With this in mind, the bank’s corporate advertising campaigns should make sure that the consumer is properly informed about its products and solutions to solve difficulties. They don’t just give financial services; they also provide customers with peace of mind.

Based on the fact that many banks recognise the value of advertising, but some still believe it isn’t something that needs to be done constantly, this study tries to determine how frequently and how successfully banks engage in cooperative advertising.

1.3 AIM OF THE STUDY

This study aims to ascertain the extent to which a particular has exchanged cooperative advertising as a component of the marketing plan employed, as well as the impact of some bank customers’ marketing recommendations for co-operative advertising banks that are effective.

1.4 SIGNIFICANCE OF THE STUDY

The traditional banking practise of waiting for customers while seated should be considered suicidal. A bank with cutting-edge amenities and services might not still generate a significant profit if it stays silent. And when an issue arises, taking action to fix it can be a little too late.

It is believed that this study would provide knowledge that will help the bank create, maintain, and enhance a channel of communication with its customers.

A more effective banking system can be anticipated with potential for future development when its public is aware of policies, aspirations, and other relevant information.

1.5 RESEARCH QUESTIONS

The following research questions should be able to be answered by the research papers that are now available.

a) Does the bank’s corporate headquarters advertise?

b) Do banks use truthful corporate messaging?

c) Does corporate advertising affect a customer’s decision to use a bank?

d) Which advertising medium is most successful for marketing banks?

e) Do banks’ corporate advertisements raise their clients’ awareness of them?

1.6 RESEARCH HYPOTHESIS

The underlined hypothesis will guide the researcher’s work during the study’s execution, and the conclusion will be made as a result.

a. More corporate advertising won’t make customers more aware of bank operations.

b. In corporate advertising, customer awareness is not the most successful kind of marketing.

1.7 SCOPE OF THE STUDY

Although there hasn’t been much published on the subject of corporate advertising as all-effective promotional techniques in the marketing of banking services,

the fact that trust is the cornerstone of the banking industry implies that it will be difficult for a bank to pay lip service. Moving profit is the only way to stay in business, and corporate advertising aids in achieving profit targets.

Banks can only produce money as long as the public believes that they are deserving of continuing to operate, and corporate advertising often aims to accomplish the following.

1.8 DEFINITION OF TERMS

A bank is a business that has been given permission by the Central Bank of Nigeria (CBN) to take deposits from its members’ businesses in general through the insurance banking licence.

Banking: Receiving money from an outside source as a deposit, regardless of interest payments and grating of money, loans, and acceptance of credit,

as well as the purchase and sale of security for the benefit of others, the assumption of guarantees and other warranties for others, the effecting of transfers and clearing, and other related activities can all be considered to be part of the banking industry.

Bank marketing is the development and profitable execution of customer-satisfying services. The goal of bank marketing is to create a unique brand identity, which is thought of as the foundation of a financial institution’s reputation.

Corporate advertising is a form of marketing that aims to build a company’s reputation among customers and other businesspeople while also generating interest in the products and services it offers.

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IMPACT OF MONETARY POLICY ON THE PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA

1 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Commercial banks are generally in charge of the banking industry, which is by far the most significant in emerging nations like Nigeria. Worldwide, it is commonly known that banks have a special role in driving economic growth (Adegbaju and Olokojo, 2008; Kolapo, Ayeni, and Oke, 2012; Mohammed, 2012).

In fact, it may be claimed that banks’ intermediation role acts as an accelerator for economic growth and development by bringing investment funds from the economy’s surplus units and making them available to its deficit ones. As a result, banks offer a wide range of financial services to their clients.

Therefore, it can be claimed that the banking sector’s effective and efficient performance is a crucial pillar of any country’s financial stability.

The pace of a country’s economic growth and the long-term viability of the banking sector are both accelerated by banks’ credit-extension policies to the general people for productive purposes (Kolapo Ayeni, and Oke, 2012; Mohammed, 2012).

In a similar vein, the banking sector is crucial to the stability of the country’s economy because it plays crucial roles in the allocation of credit, the payment and settlement system, and the implementation of monetary policy (Mohammed 2012).

It must be emphasised that banks further their own performance by carrying out these duties. To put it another way, deposit money banks typically mobilise savings and make loans and advances to their numerous consumers while keeping in mind the profitability, liquidity, and safety of their operations (Okoye and Eze, 2013).

According to Imala (2005), the primary goals of the banking system in Nigeria are to maintain price stability and promote quick economic growth through their function as an intermediary in mobilising savings and fostering banking habits at the household and microbusiness levels.

The commercial banks do increase or decrease the amount of money that is available to the economy, and they are also employed as a tool by the Central Bank of Nigeria (CBN) to carry out one of its main responsibilities of creating an executive system and a steady economic expansion.

Through a procedure specified in the Central Bank of Nigeria Decree 24 1991, the Central Bank of Nigeria (CBN) handles this duty on behalf of the Nigerian government.

In order to implement the approved monetary policy, the governor of the Central Bank of Nigeria must submit ideas to the president of the Federal Republic of Nigeria, who has the authority to accept or change such proposals.

The Monetary Policy Guidelines and Circular, active within a fiscal year but subject to change throughout the year, are directed by the Central Bank of Nigeria to banks and other financial institutions. If a specific provision of the guideline is not followed, penalties are typically stipulated (CBN Briefs, Series number 95/03).

The Central Bank of Nigeria periodically and specially examines the books of specific licenced financial institutions as a monitoring tool. These institutions are also required to give frequent reports on their operations to the Central Bank of Nigeria.

Several monetary policy measures have arisen in the socioeconomic context of Nigeria to slow down the nation’s dynamic economic system. The Central Bank of Nigeria makes ongoing efforts to maintain an appropriate level of money supply growth to ensure domestic and long-term stability as well as sustainable growth.

It does this by exercising discretionary control over the money supply through expansion or contraction of the money supply as well as by adjusting interest rates to make money more expensive or less expensive depending on the environment and the policy being followed.

According to Oloyede (2008), the manipulation of monetary policy is what the monetary authorities often do to achieve their goals of credit control, budgetary restraint, price stability, economic growth, full employment, and balance of payments equilibrium.

The methods used by the monetary authority to implement monetary policy measures must have had an effect, either favourably or negatively, on the performance of Nigerian commercial banks among other financial institutions.

The level and structure of interest rates, the money supply, the expansion of the banking industry’s competitiveness, and liquidity management are some of the factors included in this research study’s effect analysis.

The goal of this research project is to discover the monetary policy tools the Central Bank of Nigeria uses, their effectiveness, and how they affect the performance of Nigerian banks.

Globally, there have been major shifts in the formulation and execution of monetary policy over the last ten years. Several developing nations include: Nigeria has implemented a number of policy initiatives to meet specific goals.

To achieve desired goals, such as fostering economic growth, achieving full employment, lowering the level of inflation, maintaining a healthy balance of payments, sustaining economic growth, increasing industrialization, and ensuring economic stability, monetary policy is crucial.

Because of the ongoing global financial crisis, which has affected many developing and emerging economies around the world, other supplementary goals of monetary policy have recently been identified as smoothing the business cycle, preventing financial crises, stabilising long-term interest rates, and stabilising real exchange rates (Mishra and Pradhan, 2008).

For the majority of economies, monetary policy goals include maintaining equilibrium in the balance of payments, promoting employment and output growth, and fostering sustainable development. In order to achieve internal and external balance and to promote long-term economic growth, these goals must be met.

The detrimental impact of price fluctuation, which undercuts the goals, led to the need of price stability. There is widespread agreement that domestic price volatility hinders investment and growth and weakens the usefulness of money as a store of wealth.

The Central Bank of Nigeria (CBN) is in charge of implementing monetary policy, which is dependent on the institutional framework chosen, the operational economic environment, and other factors. According to the CBN Act of 1958, the Central Bank of Nigeria’s mandate is as follows:

Legal tender currency insurance

Keeping external reserves to protect the currency’s value on a global scale.

Supporting a sound financial system and monetary stability.

Serving as the government’s banker and financial adviser.

The promotion of growth and employment are the monetary policy’s secondary objectives, while the maintenance of price stability is the primary focus of the current framework. The legal framework within which monetary policy is implemented determines how well it performs.

The legal framework’s effects on the level of aggregate demand through the supply of money, the cost of money, and the accessibility of credit are quantitative, broad or indirect, and qualitative, selective or direct, respectively. The first category of the two types of instruments, variants, open market operations, and required reserve ratio, comprises banks.

Through commercial banks, they are intended to control the general level of credit in the economy. Specific credit kinds are the focus of the selective credit regulation. This involves controlling consumer credit and altering the margin requirement (Jhingan 2003).

From the perspective of past monetary economists and policy maker interns of its effects on the economy, monetary policies have proven to be stabilisation goals among all the tools available to the government for directing the cause of the economy (CBN guideline 2002).

Indeed, developing and implementing monetary policy has become a crucial government duty to keep the economy on track. Policies are created to achieve specific objectives over a predetermined time period rather than just for their own sake.

In general, the main goals of monetary policy are to implement expansionary monetary policy measures during periods of economic downturn. The money supply is regulated by monetary policy since it is thought that how quickly it grows affects inflation.

The fundamental goal of monetary policies is to aggregate actual economic sectors, such as the degree of capital price stabilisation and economic progress, rather than to aggregate the policies themselves.

In order to incorporate the desired behavioural change in the monetary policy, policies are designed to modify the trend of some monetary variables in a specific way.

The Central Bank’s responsibility is to implement appropriate monetary policy that supports the primary economic goal and contributes to stable balance of payments, sustained inflation, and GDP growth. This is accomplished by implementing either a direct or indirect monetary technique to manage monetary trends.

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EXPLORING THE DETERMINANTS OF ENTREPRENEURSHIP AMONG GRADUATES IN NIGERIA

PREAMBLING – – – – – – The promotion of indigenous small scale firms is currently receiving a lot of attention from both the state and federal governments in Nigeria with the goal of promoting entrepreneurship.

This study addresses important issues like life aspirations, likely sources of financial capital, entrepreneurial orientation, attitude towards work, intention towards becoming an entrepreneur, perceived behavioural control, behavioural beliefs, nor mature belief and control beliefs others.

The importance of the social status of entrepreneurial actions and situations was noted by Johannisson (1991) and Auto et al. (1997), who also noted the favourable effects of students’ perceptions of entrepreneurship as a career option.

Both current behaviour and future intentions are influenced by entrepreneurship education. The major differences between students who have completed entrepreneurship courses and those who have not are examined by Kolverldmoen (1997).

2.2 THE CONCEPTUAL FRAMEWORK It has been said that entrepreneurship is a creative and original response to the environment. According to Meredith et al. (1991), an entrepreneur is someone who has the capacity to recognise and assess business opportunities, assemble the resources required to take advantage of them, and take the necessary steps to achieve success.

In early empirical research, this interest was heavily focused on the psychological traits of business founders, even though the research was not closely related to contemporary developments in psychology.

This turn of events has been mirrored by a rising academic interest in entrepreneurship, understood as the creation and establishment of new independent firms.

Almost limitless lists of entrepreneurial traits were proposed using the trait method, which was frequently used (Hornaday 1982). However, it finally became clear that this line of inquiry was unable to provide more than a small portion of the answer to the question, “What makes people found new firms?”

2.3 The Necessity, Range, and Characteristics of Entrepreneurship It has long been understood that entrepreneurship is a crucial component of economic growth.

In France at the beginning of the 16th century, army commanders were referred to as entrepreneurs. It was first used to describe a leader in their business who buys and sells items at specific pricing in the 18th century.

Since years, the main emphasis of economics has been on resource allocation and how it is accomplished by the market or by government, not on entrepreneurship.

Only recently, with the resurgence of interest in the topic of economic growth, has Schumpeter’s theory called for more restraint. Surprisingly little empirical study has been done on entrepreneurship in the economy.

One of the most frequently cited justifications for starting a business or wishing to do so is the need for autonomy (or independence) (Bamberger, 1986; Cromie, 1988; Scot and Twomey, 1988).

2.4 THE ENTREPRENEURIAL TRAITS Noel (2001) provided a detailed explanation of the significance of entrepreneurship, focusing on the growth of entrepreneurial intention and self-efficacy perception.

The sample’s students all completed entrepreneurship education programmes and finished with degrees in entrepreneurship, management, or other fields.

Noel’s findings at least partially supported the hypothesis that graduates in entrepreneurship were more inclined to start new businesses, had higher levels of intention, and had better developed perceptions of their own efficiency.

In his work, McClelland (1961) identified the necessity for achievement (also known as “n-achievement”) to be connected with the entrepreneurial spirit required to take chances in order to expand a nation’s economy. He added that entrepreneurs that possess the following qualities are likely to succeed.

Entrepreneurs are very calculated risk takers, therefore when a crisis arises in a firm, they support themselves. However, they do not gamble. Â Entrepreneurs typically avoid low-quality businesses because they lack challenges and steer clear of high-risk situations because they want to succeed.

They enjoy overcoming obstacles. When you must choose between two or more options, the prospective outcomes cannot be objectively assessed, you are in a risk position. A risky scenario has both the potential for success and failure. The more at stake, the bigger the potential loss.

SELF CONFIDENCE: Entrepreneurs are self-assured in their abilities. They think that in order to fulfil their potential, they must take ownership of their actions. Entrepreneurs are typically generally upbeat and aspire to freedom.

They enter private business even when others are hesitant to do so or are failing because of their self-confidence, prior experience, capacity for responsibility, and ability to shape their own destiny.

Entrepreneurs are driven people that put forth a lot of effort to accomplish their goals. To ensure that the work was completed, he made more of an effort. He balances his personal and work time well. Even after the task is over and the day is over, he keeps working. Entrepreneur is emotionally invested in his or her work.

GOAL SETTING: Entrepreneurs have goals, and they set their own goals based on those goals. Until the goals in their varied strategies try to reach the given goals or objectives, some appear to be tough and restless in the quest to attain the set goal.

Accountability: Entrepreneurs strive for success and put a lot of effort into doing so, but occasionally encounter failure in the course of their endeavours. According to the business owner, profitability and growth will result in stability, growth, and development of the enterprise.

In order to accomplish the business’s goal, the entrepreneur works as a team with its workforce, encouraging cooperation and soliciting input. Â In order to be able to recount and share the tales of how they first started the firm, they must also keep a thorough record of their accomplishments.

The entrepreneur benefits from this record-keeping mindset when it comes to planning and high business ethics. He is not only interested in his bank account, but also in the things he may buy with it.

Even though others would define accountability in terms of growth and profit, he measures himself differently. Since his entire life depends on him, he is only responsible to himself.

VERSATILITY: Entrepreneurs frequently possess a high level of knowledge and versatility, traits necessary to ensure that both they and their employees do the task to the highest standard.

2.5 ENTREPRENEURIAL TASKS Numerous tasks related to the creation and management of a business enterprise fall under the umbrella of entrepreneurship.

These tasks include finding profitable investment possibilities, assembling the resources required for the manufacture and delivery of goods and services, and organising and managing both people and material resources.

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EFFECTS OF CASHLESS POLICY ON BANK LIQUIDITY

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

A cashless economy is one in which transactions can be completed without the need for actual cash as a means of exchange, instead using credit or debit card payment for products and services.

According to Omotunde et al (2013), the Central Bank of Nigeria’s (CBN) cashless economy policy initiative is a move to improve the financial landscape, but the policy’s long-term sustainability will be a function of end-user endorsement and compliance, which can be aimed at reducing bank liquidity risks.

According to Tunde Lemon, Deputy Governor of the Central Bank of Nigeria, the CBN cash policy mandates a daily cumulative limit of N150, 000 and N1,000, 000 on free cash withdrawals and deposits by individual and corporate customers in Lagos state since March 30, 2012.

Individuals and business entities who conduct cash transactions in excess of the restrictions will be assessed a service fee for sums in excess of the cumulative limits. Furthermore, with effect from January 1, 2012, third-party cheques in excess of N150, 000 will be ineligible for encashment over the counter.

The clearing house will get the value of such cheques. From January 1, 2012, all Nigerian banks were expected to stop providing cash in transit lodgment services to businesses and customers. Omotunde et al. (2013) went on to say that the policy streamlines fund transfers by utilising sophisticated information technology, hence minimising time spent in the bank(s).

Wizzit, a rapidly expanding mobile banking firm in South Africa, with over 300,000 customers in the country. Similarly, M-PESA was introduced in Kenya as a small value electronic system accessible via standard mobile phones.

According to them, it has witnessed outstanding growth since its launch in Kenya by mobile phone operator (Safaricam) in March 2007, and has already been accepted by nine million subscribers, representing almost 40% of Kenya’s adult population.

Wizzit and other mobile financial services, such as M-PESA in Kenya, are assisting low-income Africans in making long-distance financial transactions with their cell phones, reducing travel costs, eliminating the risks of carrying cash, and avoiding most banking charges (Akintaro, 2012).

Banks are essential components of all modern financial systems. Banks must be safe and be regarded as such in order to work properly. The single most crucial assurance is that the economic value of a bank’s assets exceeds the liabilities that it owes.

The difference represents a reserve of “capital” accessible to cover any type of loss. The recent financial crisis, on the other hand, highlighted the significance of a second form of buffer, the “liquidity” that banks have to handle unexpected cash losses.

A bank can be solvent, with assets exceeding liabilities on an economic and accounting basis, and nonetheless collapse suddenly if depositors and other funders lose faith in it.

Liquidity in banking is defined as the ability to satisfy obligations on time without incurring unacceptable losses (Odior & Banuso, 2012). Liquidity management is a daily activity that requires bankers to monitor and forecast cash flows to ensure appropriate liquidity is maintained. It is vital to maintain a balance between short-term assets and short-term liabilities.

Client deposits are an individual bank’s primary liabilities (in the sense that the bank is expected to return all client deposits on demand), whereas reserves and loans are its major assets (in the sense that these loans are owed to the bank rather than by the bank).

The investment portfolio accounts for a lower proportion of assets and is the principal source of liquidity. To meet deposit withdrawals and increased lending demand, investment securities can be liquidated. Banks can also generate liquidity through selling loans, borrowing from other banks, borrowing from a central bank such as the US Federal Reserve, and raising extra capital.

In the worst-case situation, depositors could demand their money if the bank is unable to create enough cash without suffering significant financial losses. In extreme instances, this could lead to a bank run. Most banks are subject to legally mandated procedures designed to aid in the prevention of a liquidity crisis.

1.2 STATEMENT OF THE PROBLEM

Banks can generally keep as much liquidity as they like because bank deposits in most developed countries are protected by governments. Raising deposit rates and successfully promoting deposit products can help to alleviate a lack of liquidity.

The cost of liquidity, on the other hand, is a significant indicator of a bank’s worth and success. A bank can attract large amounts of liquid funds.

Lower expenses lead to more profitability, greater stability, and increased confidence among depositors, investors, and regulators. This is the first study to look into the relationship between Nigeria’s cashless policy and bank liquidity.

1.3 OBJECTIVES OF THE STUDY

The following are the study’s objectives:

To investigate the effect of cashless policies on bank liquidity.
To investigate the impact of a cashless policy on the Nigerian economy.
To learn about the obstacles that Nigeria’s cashless strategy faces.

1.4 RESEARCH QUESTIONS

What effect does cashless policy have on bank liquidity?
What is the impact of Nigeria’s cashless policy on the economy?
What are the problems that Nigeria’s cashless policy faces?

1.5 HYPOTHESIS

HO: There is no discernible link between cashless policy and bank liquidity.

HA: There is a strong link between cashless policies and bank liquidity.

1.6 SIGNIFICANCE OF THE STUDY

The following are the study’s implications:

The study’s findings will educate bankers and other stakeholders in bank management on the relationship between cashless policies and bank liquidity.

This study will contribute to the body of literature on the effect of personality traits on student academic achievement, forming the empirical literature for future research in the field.

1.7 SCOPE AND LIMITATIONS OF THE STUDY

This research will look at the connection between cashless policies and bank liquidity.

STUDY LIMITATIONS

Financial constraint- A lack of funds tends to restrict the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data collection procedure (internet, questionnaire, and interview).

Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.

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INFLATION CONTROL THROUGH THE APPLICATION OF CENTRAL BANK OF NIGERIA

ABSTRACT OF INFLATION CONTROL THROUGH THE CENTRAL BANK OF NIGERIA’S APPLICATION
This study looked at how the central bank of Nigeria (CBN) used credit tools to control inflation.

The study aims to uncover the variables causing high inflation rates in order to give recommendations on the best methods that may be useful for effective inflation control policies. The study used a questionnaire instrument to generate the primary data needed, using the survey research approach.

The generated data was then put through the Chi-square inferential statistical test. The test revealed that credit control methods devised by the Central Bank of Nigeria (CBN) had no substantial impact on price stability,

and the Central Bank of Nigeria (CBN) has had no meaningful impact on checking excessive inflation in Nigeria. The study suggests that monetary authorities implement policy actions that will have a long-term impact on pricing.

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Inflation has been a global issue for many years, and no country has been immune. Although some countries’ economies have been hit worse than others, every country in the globe has suffered inflation at some point.

In the 1960s, inflation became more prominent in developing countries’ economies. This gave rise to the numerous economic initiatives implemented by various developing countries in order to revitalise their economies.

In Nigeria, inflationary pressures have become a major source of worry since the implementation of the structural adjustment programme (SAP) in 1986, which resulted in a more liberalised economic environment.

As a result, three criteria were employed to calculate inflation: the Gross National Product (GNP), the Consumer Price Index (CPI), and the Wholesale Price Index (WPI).

In Nigeria, inflation rates are primarily assessed using the Consumers Price Index (CPI), for which monthly, quarterly, and annual data are available. High inflation episodes did not occur until the early 1970s, when inflation soared significantly from a low of 3.5 percent between 1960 and 1970.

Post-independence industrial policies, increased government spending to finance the civil war, low levels of production throughout the conflict, post-war reconstruction, and the Adebo/Udoji wage hike following the oil boom.

During the early 1980s oil market collapse, inflation soared from a low level of 16 percent in 1980 to a peak of 38 percent by mid-1984. The economy’s inflation rate was nearly 40% (39.6 percent to be precise).

This was due to the government’ prohibition on the importation of food and other agricultural products, which was prompted by multiple balance of payment pressures.

The next year, the rate of inflation was 5.5 percent, indicating a decrease. The result was the government’s measure at the time. In 1987, the inflation rate increased slightly to 10.2 percent.

This was owing to the fact that Nigeria implemented the structural Adjustment Programme (SAP), which resulted in a more liberalised economic environment. The balance of payments difficulties that prompted the adjustment programme, however, remained.

The situation deteriorated further, with increased idle industrial capacity, plant closures, worker retrenchment, and so on. Shortages rose steadily throughout the years, reaching an all-time high of 40.9 percent in 1989.

It then fell sharply to 7.5 percent in 1990 and 13.0 percent in 1991, then ascended to 44.5 percent in 1992, 57.2 percent in 1993, 57.0 percent in 1994, 72.8 percent in 1995, and 29.3 percent in 1996 in order to improve price stability,

efforts were directed towards managing excess liquidity, so a number of were introduced to reduce liquidity in the system, this is done by increasing the commercial bank reserve requirement in 1999, which reduced the inflation rate to 6.6 percent, 6.9 percent in 2000, and The inflation rate grew to 14.0 percent in 2003, 15.0 percent the next year, and 17.9 percent in 2005.

The new monetary policy framework for monetary policy execution was implemented in 2006, with the goal of attaining price stability and non-inflationary growth, as stated in the national economic empowerment and development strategy (NEEDS).

However, the aim for single inflation was met in 2006, with inflation standing at 8.2%. The inflation rate fell to 5.4 percent in 2007 before rising to 11.5 percent in 2008.

1.2 STATEMENT OF THE PROBLEM

One major challenge confronting most central banks, including Nigeria’s, is the creation and implementation of monetary policy. This is due to the fact that any error in formulation or implementation will have a negative multiplier effect on every aspect of the economy.

When a goal is set, the ultimate goal is to achieve that goal. Any departure in monetary policy causes the monetary authorities great concern.

Despite the fact that the CBN has been designing and implementing sound monetary policies, the rate of inflation in Nigeria has been rising, affecting both creditors and debtors in different ways.

In an inflationary period, creditors lose because they receive money whose purchasing power has decreased, resulting in fewer commodities purchased, but debtors gain.

There is therefore a need to maintain price stability, which will be beneficial to creditors, debtors, and other players in the Nigerian market economy. This study aims to assess the function of the Central Bank of Nigeria (CBN) in this regard by utilising credit control measures.

1.3 OBJECTIVES OF THE STUDY

In accordance with the problems described above, the following objectives were selected for this study.

i. Examines strategies adopted by Nigeria’s central bank (CBN) to maintain price stability in Nigeria.

ii. Determine the extent to which the Central Bank of Nigeria (CBN) has succeeded in containing Nigeria’s high inflation.

iii. To assess the potential impact of inflation on the Nigerian economy.

iv. To identify the variables causing high inflation rates in order to give recommendations on the best strategies that may be useful for effective inflation control policy.

1.4 RESEARCH QUESTIONS

To guide the researcher, the following questions were asked in accordance with the study’s objectives:

i. To what extent have the CBN’s credit control policies impacted Nigerian price stability?

ii. How successful has the Central Bank of Nigeria been in containing high inflation in Nigeria?

iii. What are the implications of inflation on Nigeria’s overall economy?

iv. What factors contribute to Nigeria’s high inflation rate?

1.5 RESEARCH THEORIES

The following two null hypotheses are created to rule the investigation based on the study’s aims and research questions:

H01 Credit control mechanisms devised by the Central Bank of Nigeria have no substantial impact on Nigerian price stability.

H02 The Central Bank of Nigeria has had little impact on reducing Nigeria’s excessive inflation.

1.6 SCOPE OF THE STUDY

The scope of this study is based on the Nigerian economy, but for a thorough examination, references will be made to other economies where they provide a substantial base.

The study therefor discusses the many instruments that the Federal Government of Nigeria has established through the central bank to limit the amount of credit in the economy.

1.7 THE SIGNIFICANCE OF THE STUDY

The study will be critical for policymakers, particularly the Central Bank of Nigeria and the Federal Government, who will learn how the instruments of credit control issued by the Central Bank of Nigeria to banks and other financial institutions can be used to combat inflation in the country and then effectively used to keep the rate at an acceptable level in the economy.

The Central Bank of Nigeria (CBN) and the Federal Government would know possible avenues for improvement, sectors that require more credit, and sectors that require less credit, with the help of the identified difficulties.

Furthermore, the banking industry will benefit greatly. It would be crucial to the sector because it will disclose how well the sector has fared while also supporting various CBN credit control devices that limit their profit-making possibilities.

1.8 LIMITATIONS OF THE STUDY

They are bound to be limits in some form in every setting, and this study work is no exception. One of the stresses experienced by the researcher is financial. A full research task is not easy to afford for a student; the expense of transit, photocopying, and library admission fees has increased nearly tenfold from what it used to be.

Another obstacle is time; time is not on the researcher’s side because of the stress and delay in leaving school, according to the Central Bank of Nigeria (CBN) time policy, and mixing it with final examination reading.

Another issue in this research effort is meeting with suitable bank officials for project information, and when they are accessible, they claim to be too busy. Despite these obstacles, the investigation was completed successfully.

1.9 DEFINITION OF THE TERM

Credit Control Instruments: The Central Bank of Nigeria use these instruments to manage the amount of credit given to various sectors of the economy by commercial and merchant banks.

The Consumer Price Index (CPI) is a single statistic that represents the average of the prices of a selected number of consumer items in comparison to some base year.

Money Supply: The total amount of money in circulation, which includes currency (notes and coins) and demand deposits with commercial banks, is denoted by M1 and M2. M1 refers to money that only recognises items that can be used immediately and without loss of value as money.

As a result, M1 is defined as currency in circulation plus demand deposits held by the private sector in banks (C+DD). M2 measures total liquidity in the economy, which includes M1 plus savings and time deposits.

(C + DD + SD + DT). The CBN’s monetary base, also known as high powered money or reserve money, includes currency notes stored both outside and inside banks.

Fiscal Deficit: The excess of government expenditure over government revenues. It is often measured in terms of its size in relation to nominal Gross Domestic Product (GDP).

Other Financial Institution: Any individual, body, association, or group of persons, whether incorporated, other than banks licenced under the Banks and Financial Institutions Act (Bofid) under Section 51 of the Banks and Financial Institutions Act (Bofid) of 1991, which carries on the business of a discount bank.

Bank: Commercial and community banks, as well as profit and savings banks that have yet to begin operations.

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A STUDY OF THE USE OF FINANCIAL RATIOS FOR THE ASSESSMENT OF THE PERFORMANCE AND THE PROFITABILITY OF A FIRM

ABSTRACT

This research paper, “The study of the use of financial ratios for the assessment of a firm’s performance and profitability,” covered every important area of ratio analysis.

Furthermore, it recognised the many types of ratios, their applications, those who profit from such analysis, and the constraints associated with the notion of financial ratio analysis.

However, this study demonstrated the importance of financial ratio analysis to the publics of an organisation, specifically the equity holder, short-term creditors, long-term creditors, management, customers/clients, and the tax authority.

A lending banker can also use ratio analysis to examine the viability of a borrowing firm in order to decide whether or not to extend loans.

The researcher used secondary sources of data to assess this research effort, as advised. This requires reviewing related literature written by well-known and important authors of textbooks, journals, periodicals, and newspapers, as well as other publications.

This research is critical for both students and individuals working in agriculture. It is recommended reading for agricultural practitioners.

The researcher wants to produce a paper titled “A study of the use of financial ratios for assessing a firm’s performance and profitability.”

Most lending bankers are currently confronted with the problem of loan default as a result of insufficient research or evaluation of the borrowing firm’s financial statements using financial ratio analysis.

As a result, the suggested study objective is to identify the numerous ratios, functions, and issues associated with the use of financial measures in measuring the performance and profitability of a borrowing organisation.

However, the researcher also plans to collect data through secondary sources, which includes a review of relevant textbooks, journals, periodicals, and so on.

Furthermore, the researcher aims to emphasise or confine her issue to the aspect of bank lending in relation to the application of financial ratio analysis to examine a borrowing firm’s performance and profitability.

Finally, in terms of the review of relevant literature, the researcher wishes to expand on the notion of financial ratios, various types of financial ratios, their uses and relevance, as well as constraints on their use or application.

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The importance of Financial Rationing and its analysis cannot be overstated. According to Iloh (2001), good financial planning for any functional organisation must be tied to the organization’s existing strengths and weaknesses.

In order to identify the aforementioned criteria, it is important to assess the organization’s performance over a specific time period. As a result, financial ration analysis is one of the approaches used to determine an organization’s level of performance.

It is defined as the approaches for reducing aggregate financial data into meaningful quotients that can then be compared to other financial data.

However, the researcher became interested in this area in order to determine the impact of financial ratio analysis, particularly on lending bankers. This is because credit extension is a difficult and technical operation;

one of the prerequisites for successful lending is an examination of a borrowing firm’s financial statements. This is accomplished through the use of ratio analysis.

Furthermore, an examination of such financial statements will allow a lending lender to assess the borrowing firm’s viability in terms of liquidity, profitability, and the nature of its funding.

Finally, having a thorough understanding of the ideas discussed above through Financial Ration analysis, the lending banker will be able to make an informed judgement on whether to accept or reject a certain loan proposal or request.

1.2 STATEMENT OF THE PROBLEM

Loan defaults are becoming increasingly common in Nigerian banks. Most banks have been affected, specifically their capital sufficiency, which has inevitably resulted in hardship and failure.

Manipulation of accounting records by borrowers, as well as incorrect evaluation and analysis of the borrower’s financial accounts, are among the reasons of loan default and bad debt, according to Orjih (1996).

That is, it allows fund borrowers to diverge from the payment or payback terms of funds borrowed from the lending institution.

For several years, most banks have been in crisis and failure as a result of irresponsible lending and improper financial statement analysis. As a result, the researcher seeks to discover the required procedures that may be implemented to repair this dire scenario.

1.3 AIM AND OBJECTIVES OF THE STUDY

The purpose of this research endeavour (the use of Financial Rations by a lending banker to measure a borrower’s performance and profitability) is to obtain.

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NAIRA EXCHANGE RATE DEPRECIATION AND DOMESTIC INFLATION IN NIGERIA

INTRODUCTION

CHAPTER ONE

1.1 BACKGROUND OF THE STUDY

The depreciation of the naira, combined with the persistent rise in the inflationary rate, has been a severe blight on Nigeria’s economy. To a layperson, inflation is a phenomenon to welcome as his income rises daily,

oblivious to the negative consequences of such an increase. The layman does not know whether there is any depreciation or improvement in the currency rate, or whether the income is nominal or real.

However, the complementing problems of naira depreciation and inflation have been a source of obesity in the hearts of Nigerians, both past and present rulers, as well as many patriotic Nigerians.

Since 1951, when the ministerial government was introduced between 1984 and 1986, the naira was quoted against the dollar and the pound as the only intervening currencies in line with the International Monetary Fund (I.M.F) demand.

IMF had previously worried that the naira exchange rate was increasing above the 2% limit. After that, the naira was devalued to 1.000 4 US dollars. Prior to her independence, Nigeria’s inflation rate was not a major issue. However, soon following the civil war, in the 1970s, Nigeria’s inflation rate took on a new dimension.

The naira’s value versus the dollar and the pound sterling began to fall; in 1970, a naira was worth 1.400 dollars and 0.584 pounds sterling. In 1971, one naira was worth 1.44 dollars and 0.582 pounds sterling. In 1973, a naira was worth 1.519 dollars and 0.614 pounds sterling.

It was 1.589 dollars and 0.675 pounds sterling to the naira in 1974, but it grew to 1.623 dollars and 0.734 pounds sterling in 1975 as a result of the Udoji pay award of 1974, which increased wage significantly. Higher salaries increased consumers’ purchasing power, causing their prices to rise.

The adoption of the Structural Adjustment Programme (SAP) and second-tier foreign exchange (SFEM) as part of one of the government’s key policy packages in 1986 aimed at making the overvalued naira more realistic and responsive to market forces. C. Anyanwu (1989) observed that the SAP/SEFEM was a disaster that was rapidly eroding the foundation of the Nigerian economy.

As a result, the naira’s exchange rate devaluation persisted (from 1.5691 naira to 1.0 dollar at the end of September 1986 to 7.8950 naira to 1.0 dollar by mid February 1990).

Also, by August 1998, the dollar was selling for 21.9960 naira on the Foreign Exchange Market (FEM), but it was selling for 45 naira on the parallel market.

Before 1990, the naira’s value had depreciated to the point where the exchange rate was less than one dollar to one naira. In 1990, one US dollar equaled 0.119 naira. By the 12 April, 2001 (CBN) 1994, it had fallen to 115.7 to the dollar. It has climbed to N130 to the US dollar by 2003.

1.2 STATEMENT OF THE PROBLEM

The ongoing depreciation of the naira has a variety of inflationary repercussions on the Nigerian economy. The consequences of this macroeconomic dilemma might be highlighted in stages.

To begin with, depreciation of a currency is intended to lessen or discourage undue reliance on a specific foreign currency or commodities.

This raises domestic pricing of such imports, which may be intermediate items, and hence tends to raise the cost of manufacture of final goods.

In another way, a deteriorating naira exchange rate could cause wage rate or demand inflation. When the naira is devalued, the price of important raw materials rises, and domestic firms may be willing to increase production while reducing competition as a result of the rise in raw material prices.

As a result, the output of the enterprises would draw high prices, requiring salary increases in order for consumers to reach their expected level of consumption or maintain their real income, which, according to Sotersten (1994), will worsen the overall situation.

Nigerians, being one of the developing nations, rely largely on imported inputs, tools, and machinery, the cost of which is typically very high due to the naira’s weak exchange rate.

This will deter potential investors because investment would result in lower national product, which is an indicator of economic stagnation or retrogression.

As a result, Obasanjo (1999) highlighted that anything may happen if regulatory authorities did not take efforts to clean up the situation, thus the researcher wishes to identify the problems and provide solutions.

1.3 SIGNIFICANCE OF THE STUDY

The researcher went above and beyond to determine the potential significances for the purposes of this study.

(i) To outline the procedure for other researchers who wish to write on this issue.

(ii) To close the inflationary or deflationary gap

(iii) To calculate the cumulative impact of broad money expansion and significant naira depreciation.

(iv) To determine the fate of the naira in relation to other domestic currencies.

(v) To make decisions about government policies.

1.4 OBJECTIVE OF THE STUDY

The following are the study’s objectives:

(i) Determine the causes of inflation and exchange rate depreciation.

(ii) Determine the extent to which the depreciation of the Nigerian naira has affected domestic inflationary rates in the country.

(iii) Evaluate the success of previously implemented government programmes.

(iv) Make suggestions and recommendations on acceptable future policies.

1.5 RESEARCH HYPOTHESIS

Because the research data was primarily obtained from secondary sources, the hypothesis used to establish the outcome will take two forms.

The alternate hypothesis and the null hypothesis. The alternative hypothesis (Hi) will be evaluated against the null hypothesis (Ho).

(a) Ho: No positive or substantial association exists.

In Nigeria, there is a relationship between currency rate depreciation and domestic inflation.

(b) Hello: A significant or positive association exists between

Nigeria is experiencing exchange rate depreciation and domestic inflation.

1.6 SCOPE AND LIMITATIONS OF THE STUDY

The study spans the years 1985 through 2000. It focuses on the trend of currency depreciation and inflation in Nigeria.

The study is confined to the era due to issues with the availability and acquisition of secondary data required for the research effort, which are attributable in part to the Nigerian economy’s degree of development.

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