Our Archives

Call 08068929770 or 08122972656 for any enquiries.

Project Topic:

A CRITICAL ANALAYSIS OF CAUSES AND PROBLEM OF FINANCIAL DISTRESS IN NIGERIA

Project Information:

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 63 ::   Attributes: Data Analysis, abstract, table of content ::   152 people found this useful

Project Body:

TABLE OF CONTENT

 

Title page 

Approval page 

Dedication page 

Acknowledgement 

Abstract 

Table of content 

List of tables 

List of figures 

 

CHAPTER ONE 

1.0 INTRODUCTION 

1.1    Statement of problems 

1.2    Purpose of study 

1.3    Significance of the study 

1.4    Statement of hypothesis 

1.5    Scope of the study 

1.6    Limitation of the study 

1.7    Definition of terms 

 

CHAPTER TWO 

2.0 REVIEW OF RELATED LITERATURE 

2.1    Historical background of First Bank Plc

2.2    An overview of capital base 

2.3    Under capitalization and its effects on the banking sector. 

2.4    Multiplication of Banks 

2.5    Inefficient management

2.6    Fraudulent practices 

2.7    Loan mismatches 

2.8    Effect on financial distress in Nigeria banking sector of the economy. 

 

CHAPTER THREE 

3.0 RESEARCH DESIGN AND METHODOLOGY 

3.1    Sources of data 

Primary data 

Secondary data 

3.2   Sample used 

3.3   Method of investigation. 

CHAPTER FOUR 

4.0 DATA PRESENTATION AND ANALYSIS 

4.1   Data presentation and analysis 

4.2   Test of Hypothesis 

 

CHAPTER FIVE 

5.0 SUMMARY OF FINDINGS, CONCLUSIONS AND              RECOMMENDATION 

5.1 Findings 

5.2 Conclusion 

5.3 Recommendation 

Bibliography 

Appendix 

Questionnaire

 

 

 

 

 

 

 

 

 

 

 

CHAPTER ONE

 

INTRODUCTION 

The importance of capital as a necessity though not sufficient condition for economic growth is recognized in development economy where it is believed that the position of adequate financial resources is a pre-requisite for industrial transformation.

Experiences in some countries notably Japan, India and Germany have shown that banks if sufficiently in their respective countries could serve as an engine of growth to greatly assist the promotion of rapid economic transformation of any nation. Banks all over the world occupy a strategic and lending position in financial sector. Many Nigerians see banks as places nobody can mess up. Hence, their accepting institutions as the safety place for depositing their money. It is equally because of the confidence they have in the industry as a whole that over the years, many of them imbedded this habit of savings, which in turn is very necessary of positive economic development of the nation. 

Ekechi (1995) said that confidence is a pre-requisite for economic recovery and sustained growth, but confidence is not a gift. It must be earned through the adjustment effort or rather confidence is rented because it is never yours and because it can be taken away anytime. The adjustable effort has to go on each and everyday”.

One legacy the structural adjustment programme (SAP) left on its trials is the increase in the number of banks in the country before the introduction of SAP in 1986. The number rose to about 127 as at August 1995. This phenomenal growth of banks was initially hailed as a healthy development in the economy because it was to spread the resources in the economy. 

Because of the importance of banks monetary authorities pay great attention to the banking industry. In this process, they are sometimes faced with the problems of how best to handle financial distress in Nigeria banking sector. Financial distress in Nigerian banking sector date back to 1930 when the industrial and commercial bank, (ICB) failed one year after its established.

As Hornby defined distress as “great pains, discomfort of sorrow caused by wants of money or other necessary things. 

John Ebhodaghe in explaining financial distress “two major problems are usually of serious concern. These are liquidity and insolvency”. He went further to explain liquidity as the inability of banks to meet its inabilities as they mature for payment while insolvent when the value of its realizable asset is less than the total value of liabilities. 

The reasons for early distress of banks are summarized in the following features, which characterized the banks since during the period. 

1. Foreign banks domination of deposit base, credit availability. 

2. Banks services tailored to the needs of the expatriates. 

3. Indigenous bank boom and failure resulting from under capitalization and poor quality management. 

4. Lack of banking, control and direction.

Recently, it was realized that the development of statistical based, early warning system for problem banks identification would greatly assist regulators on classifying banks into sound and unsound categories. Worthy of notes is Decree No. 26 of August 1992 that prescribed the following for banks to be adjusted healthy.

1. Specified cash reserve 

2. Specified liquidity ration

3. Adherence to prudential guidelines 

4. Statutory minimum paid up capital requirement Adequate capital ration 

5. Sound management. 

Any bank, which did not satisfy any or all the listed factors, is adjudged unhealthy. It must be expressed here that there exist a thin dividing line between a distressed and unhealthy banks. This is because a bank, which is unhealthy in the short-run, may become distress in the long run. At the core of distressed bank, are twos basic problems compared to liquidity the later could not be neglected because it is an ominous sign of insolvency. 

Therefore, in assessing the financial condition of a bank, it is customary to use the CAMEL framework. Also ownership structure and types of banks are important factors on explaining the financial condition of a bank. The recent NDIC report revealed that ownership structure was used to  explain the degree of financial distress seven out of eight banks, that were financially distressed were either owned or controlled by the state government. 

Another indicator of a distressed bank used in most countries of the world is classified assets that exceeds 100 percent of shareholders fund. Following from above, it is therefore reasonable to conclude that a distressed bank is one tht is technically insolvent the financial distress is caused by a number of factors including macro-economic conditions, the inhibitive policy of government capital adequacy, wide spread incidence of frauds, non-performing loans, unbraided risk by banks and so on. The effect of financial distress in Nigerian banking sector is a distressed economy. The causes and problems and the ways out of this financial distress will be discussed in details in this work. 

 

1.2 STATEMENT OF PROBLEM 

Financial distress in Nigerian banking sector dates back to colonial era. One of the early Nigerian indigenous banks, the industrial and commercial banks, the industrial and commercial banks (ICB) failed in the early 1930’s and between 1992 – 1994, the central bank of Nigeria (CBN) and Nigerian Deposit Insurance Corporation (NDIC) were face with the problems on how best to prevent the financial distress in the banking   sector. Within this period, more than thirty banks had been adjudged financially distressed. 

The question remains what are the causes of these financial distresses in the banking sector? According to Charles worth, research arises when there is problem to solve, peculiarities or puzzle about a phenomena or the question to attaching meaning to identify and examine the causes and problems of financial distress in Nigerian banking sector. 

 

1.3 OBJECTIVES OF THE STUDY 

in writing  this project, the researcher had certain objectives in mind. In line wit this following are the objectives of this write up.

1. To identify the extent to which low capital base has contributed to the financial distress in Nigerian, banking sector. 

2. To identify to the extent to which multiplicity of banks has contributed to the financial distress in Nigerian baking sector.

3. To ascertain how inefficient management has contributed to financial distress in Nigerian banking sector. 

4. To identify to a large extent how fraudulent practices has contributed to the financial distress in Nigerian banking sector. 

5. To identify the effects of financial distress in Nigerian banking sector. 

6. To recommend possible ways of preventing financial distress in Nigerian banking sector. 

 

1.4 SIGNIFICANCE OF THE STUDY

This study will be immense benefits to the Nigerian banking sector. This will enable them to know the causes of financial distress in Nigerian banking sector, and based on the recommendation of this study, they will know how to prevent financial distress. 

Government will also benefit. As the operators of the economy, they will know the causes and effects of financial distress in the economy. Likewise, the depositors and potential investors will also benefits. There is a need for a development conscious country like Nigeria, to evaluate the performance of her financial sectors so as not to jeopardize her development efforts. It is helped that these findings will add to existing literature on causes and problems of financial distress in Nigerian banking sector.

 

1.5 STATEMENT OF HYPOTHESIS 

To come out with a reliable result, the following hypothesis were formulated and tested statistically. 

1. Ho: Low capital base has not contributed to the financial distress in Nigerian banking sector. 

   Hi: Low capital base has contributed to the financial distress in Nigerian banking sector. 

2. Ho: Inefficient management has not contributed to the financial distress in Nigerian banking sector. 

    Hi: Inefficient management has contributed to the financial distress in Nigerian banking sector. 

3. Ho: Fraudulent practices have not contributed to the financial distress in Nigerian banking sector. 

    Hi: Fraudulent practices have contributed to the financial distress in Nigerian banking sector. 

 

1.6 SCOPE AND LIMITATIONS OF THE STUDY 

This research work covers the causes and problems of financial distress in Nigerian banking sector with reference to AFEX Bank Plc. In the cause of this study, the researcher could not carry out the work extensively due to the following constraints. 

TIME CONSTRAINTS: Time was my greatest enemy as I had to cope with my class work, assignments, home work, and the project work at the same time, and more over, most of the materials for the project work are not located in one place. 

FINANCIAL CONSTRAINTS: Finance was my major constraints since I don’t have enough fund for running around and this hindered the full coverage of the work.

 

1.7 DEFINITION OF TERMS 

BANKS: Banks are financial institutions, which hold themselves out to the public (individuals, firms, organization, and governments) by accepting deposits and giving out advances as well as performing other customers. 

FRAUDS: Fraud is intentional distorting twisting or changing of financial statement or using criminal deception to deceive someone in order to achieve illegal advantage

LIQUIDITY: Liquidity is inability of a bank to meet its liabilities as they mature for payment. 

INSOLVENCY: Insolvency is when the value of realizable assets of a bank is less than the total value of its liabilities. 

CAPITAL ADEQUACY: Capital adequacy is when banks through proper fund management has enough capital to serve as a fall back and at course, shock absorber in the event of losses resulting from business transactions. 

SHAREHOLDERS: shareholders are the owners of the bank, whose names were described to the memorandum of the bank when the bank is registered. This is done through the purchase of the bank’s shares. 

PAID UP CAPITAL: This refers to that part of the issued capital, which has been paid-up.

DISTRESS: This means great pains; discomfort or sorrow caused by wants money or other necessary things

Project Department:

MORE BANKING AND FINANCE FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS


Get The Complete Project »

Instantly Share this Project On Social Media:

CLOSELY RELATED BANKING AND FINANCE FREE UNDERGRADUATE PROJECT TOPICS AND RESEARCH MATERIALS

A CRITICAL ANALYSIS ON THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 72 ::   Attributes: Questionnaire, Data Analysis  ::   337 engagements

ABSTRACT This project work is carried out to examine the contribution of micro finance banks to the development of Small and medium scale enterprises in Nigeria. The Brass micro finance bank is used a...Continue reading »

A STUDY ON THE ACCEPTANCE AND ADOPTION OF THE CBN CASHLES POLICY IN PORT HARCOURT, NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 76 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   246 engagements

CHAPTER ONE INTRODUCTION 1.1. BACKGROUND TO THE STUDY One of the prerequisites for the development of national economy according to Ajayi et al, 2006 is by encouraging a payment system that is secu...Continue reading »

A STUDY ON THE IMPACT OF BUDGETARY CONTROLS ON THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIDELITY BANK PLC)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 80 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   260 engagements

CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY AND PROFILE OF THE ORGANIZATION Following the uncertainties prevailing in the Nigerian business environment today, managers and stakeholders mu...Continue reading »

ANALYZING PERFORMANCE APPRAISAL TECHNIQUES IN UNION BANK NIG PLC

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 67 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   766 engagements

CHAPTER ONE INTRODUCTION 1.1. BACKGROUND OF THE STUDY In any evaluation of the condition necessary for the growth and survival of an organization, the role of performance appraisal is a strategic f...Continue reading »

AUDIT INDEPENDENCE: ENHANCING ACCOUNTABILITY AND TRANSPARENCY IN CORPORATE ORGANIZATIONS

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 71 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   257 engagements

CHAPTER ONE INTRODUCTION 1.1. Background of the study The subject of transparency and accountability in modern day corporate organizations has continued to receive attention as never before. It has b...Continue reading »

CREDIT MANAGEMENT AND ISSUES OF BAD DEBTS IN COMMERCIAL BANKS IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 68 ::   Attributes: Questionnaire, Data Analysis,Abstract

The article on this topic (credit management and issues of bad debts in commercial banks in Nigeria) is an extract from literature review of the project material. The complete project work would be ma...Continue reading »

What are you looking for today?

TESTIMONIALS:

  • 1. Rita Eze from abia state university said "thank you so much for your sincerity; i will tell my friends about you guys.".
    Rating: Very Good
  • 2. JULIET from UNIMAID said "I THANK YOU GUYS FOR BEING HONEST.....I WILL TELL MY FRIENDS ABOUT YOU GUYS. THANKX SO MUCH".
    Rating: Excellent
  • 3. Lilian Terdoo from BSU said "i have nothing to say but thanx for being honest. i appreciate u guys...".
    Rating: Very Good
  • 4. Demien Johnson from UNN said "Uniprojectmaterials is a blessing to researchers. my job was eased up by you guys. your jobs have good quality and was delivered on time to me. Thanks a million times".
    Rating: Very Good
  • 5. Patience from unilag said "i was having difficulties handling my dissertation of 12000 words. until i stumbled on uniprojectmaterials, my work was ready in three days with high quality write up and excellent data analysis, i will tell all my friends about u guys. Mr Donald is a very nice person, he should be in charge of the phone. he attended to me very well. God bless. ".
    Rating: Excellent
  • 6. James Ike from College of Education, Gindiri said "Great delivery. Una dey try wella!!!".
    Rating: Excellent

Paper Information

Format:ms word
Chapter:1-5
Pages:63
Attribute:Data Analysis, abstract, table of content
Price:₦3,000
Get The Complete Project »

Best Selling Projects

Our Archives