ABSTRACT
The economy of Nigeria has a lot of structural distortion is the 1980’s. The economy policies pursued prior to 1985 made the Nigeria economy price distortions created by a highly over-valued currency and inappropriate pricing of agricultural and other local products.
The control measure introduced prior to deregulation of the economy were unable to improve the economy positively, instead, that period was characterized by short- supply of industrial inputs. Plant closure, large retrenchment of workers, shortage of goods and price inflation with unfavourable balance of payment.
The Federal Government has pursued vigorously the policy of deregulation of the economy. The structural adjustment programme was designed to attack and remove the Fundamental structural distortions prevalent in the Nigeria economy. Commercial banks should equally anticipate and sensitize itself with the challenges of a deregulated economy.
The major deregulation policies used were deregulation of interest rates structure, introduction of second tier foreign exchange market.
Since the Federal Government is contemplating deregulation as the only paramount solution to the distorted economic structure. The banking Industry (Commercial Banks) need to reposition itself to take full advantage of the gains that might arise from such deregulation. Commercial banks should equally anticipate and sensitize itself with the challenges of a deregulated economy.
APPENDIX 11
QUESTIONAIRE ADMINISTERD AMONG THE BANKING PUBLIC
Dear sir/ Madam,
This questionnaire is part of a research into the impact of interest rate deregulation on commercial banks lending operations in Nigeria
The research is in partial fulfillment of the requirement for the a ward of a Higher National Diploma (H.N.D) In Banking and Financial Department
Kindly read each question and briefly express your opinion, your honest and Unbiased opinion is highly solicited for as they will help me with date will be treated in strict confidence.
Thanks for your cooperation.
NEAMADI CHIGOZIE .M.
TABLE OF CONTENT
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE
1.0 INTRODUCTION
1.1 Statement of problem
1.2 Purpose of study
1.3 Significance and relevance of study
1.4 Scope and limitation of study
1.5 Formulation of Hypothesis
1.6 Research methodology
1.7 Definition of terms
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1. Conceptual framework
2.2. Empirical framework
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Research Designs
3.2 Sample size
3.3 Source of Data
3.4 Data Collection Method
3.5 Technique of Data Analysis
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Data presentation
4.2 Data Analysis
4.3 Test of Hypothesis
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of general findings
Conclusion
Recommendation
Bibliography
Appendix- Questionnaire
CHAPTER ONE
1.0 INTRODUCTION
The economy of Nigeria had a lot of structural distortions in the 1980s. The economic policies pursued prior to 1985 made the Nigeria economy vulnerable to external shock. Consequently the 1986 budget sought to de-emphasized controls and adopted policy measures aimed at expanding the economy resource balc. To attain this goal the 1986 budget at a tone in the structural adjustment programme which was launched in July 1980 with the introduction of structural adjustment programme came to deregulation of the Nigerian economy.
The deregulation policy which the structural adjustment called for is the process by process by which government remove selected regulations in bull-mess or order to encourage the efficient operation of market.
The theory is that fever regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower price overall. The deregulation policy was deigned to.
i. Restructure and diversity the productive base of the economy in order to reduce dependency on the oil sector.
ii. To achieve focal and balance of payment viability.
iii. To lay the basis for sustainable non- inflationary or minimal inflationary growth rate.
iv. To lesion the dominance of unproductive investment in the economy, improve the sectors efficiency and intensity the growth the sectors efficiency and intensity the growth potential of the private sector. The listed aims are not exhaustive.
The banking industry which is a major instrument through which government execute their policies, need to appropriately reposition itself to take full advantages of the gains that might arise from deregulation, as well as face the challenges.
Deregulation of the economy will definitely prose some challenges to the banking industry. However the ability to copy with the challenges which will come in the form competitive lending rates, effective management of credit risk, level of expertise in investment banking and cooperate finance activities will all be the important determinant of success for banks.
As a financial intermediary, commercial banks are expected to witness an increase in credit request with concessionaries interest rate. This is as a result of high rate of return that is expected from deregulation of the economy, especially toward deregulation of petroleum products which will definitely attract investors. This is where in the banking industry come in.
The project will therefore aim at analyzing the effect the deregulation of the economy will have on activated of commercial banks.
1.1 STATEMENT OF PROBLEM
Due to the underdeveloped nature of Nigeria banking system it is sometime said that banks have not met the standard expected to them in the process of economic development especially with the introduction of deregulatory policy. There are many problems which the commercial bank is not exception some of the problem to be treated in the text which of course threatens the financial performance of commercial banks are as follows.
The reluctant competition between commercial banks as a result of the deregulatory policy and the possibility of bank failure which prompted the Federal Government to establish the Nigeria Deposit insurance corporation.
i. Ability to cope with the high demand for bank loans with competitive lending rate.
ii. The level of expertise in investment banking and corporate finance.
iii. Ability to effectively manage credit risk these with other problems threatens the financial performance to commercial bank due to the introduction the deregulation of the economy.
1.2 PURPOSE OF THE STUDY
The general purpose of this study is to examine the performance of commercial banks under a deregulated economy with a view of assessing, the effect, challenges, and benefits as well as achievement such deregulation will pose on commercial banks.
This study attempt to critically identify and analyze the impact of government deregulation of the economy on commercial banks with the aim making useful recommendation son how to improve commercial bank performance.
Emphasis will also be made on the current banking practices and habit as means of battling with the challenges and the threats deregulation has brought with it. Also to identify the various achievements made with the inception of the policy as well as to examine how effective commercial banks have been since the inception of the policy.
Furthermore this text will try to compare the activities of commercial banks under the system of regulation and deregulation and deregulation in order to know if the main objective of the policy is been achieve. Recommendation that will enhance the efficiency of banks operations will equally be made.
1.3 SIGNIFICANCE AND RLEVANCE OF THE STUDY
The findings of this work will contribute to knowledge in the subject matter, other researcher students and the entire public will hopefully benefit from this study since it will form the basis for other research for other research work.
1.4 SCOPE AND LIMITATION OF THE STUDY
This study will cover a period of four year period (2000-2004) and a case study approach using first Bank Plc will be adopted. This project will concern itself with the financial performance of commercial banks as measured by a study of the effect of economic deregulation of the various activities of commercial banks.
In order to obtain a broader picture of the effect the deregulations of the economy have on commercial banks. Question arises will also be administer on some other selected banks, in Owerri.
However emphasis on the research will be based on First Bank of Nigeria Plc Owerri
The study will be constrained by the following:
i. The policies and conventions employed by first banks of Nigerian Plc will not necessary be the same as those used by other banks.
ii. The deregulation policies as used by the Federal Government through central bank of Nigeria on a regular basis. There is the possibility that not all policies will be available for this study.
iii. Lack of access to computation and compulsivity of handling multivariate data analysis may pole the greatest problem for the study.
Due to the time limitation and financial constraint it will not be possible in visit more than three commercial banks with concentration on first Bank of Nigeria Plc Owerri.
1.5 FORMILATION OF HYPOTHESIS
The following hypothesis will be tested.
i. The deregulation of the economy resulted in an upsurge I n the number of commercial banks in the country.
ii. The deregulation of the economy has resulted an increase in commercial banks profitability.
iii. Deregulation of the economy has led to a shape increase in banks bad and doubtful dept.
The research shall restrict itself with the use descriptive hypothesis. The null and alternative hypotheses which are normally used in statistical testing will be use, with null hypothesis represented as Ho and alternative hypothesis represented by H1.
1.6 RESEARCH METHODOLOGY
The research methodology will involve the collection of data through oral interviews to top management staff of some commercial banks, namely spring bank guarantee truest bank first ban al in Owerri.
Questionnaire will also be administered to the staff of there banks s well as the use of their financial statement. The researches will analysis the banks records from 200-2004 (A period of form years) both years inclusive.
The research will adopt the case study approach in its analysis and First Bank of Nigeria Plc, Owerri branch will be used as the case study. Major analysis will be based on information received from First Bank Plc, Owerri branch.
1.6 DEFINITION OF TERMS
1. Collateral: An item of value demanded by banks as security for loans granted to customers.
2. Credit: Money created by commercial banks through the media of loans and discounts granted to customers.
3. Data: Any kind of information (numerical or non- numerical) relevant to research.
4. Data Analysis: Critical examination of data with explanations and interpretations of research data.
5. Interview: Discullion or conference between two or more people either buy face to face or through a medium such at telephone.
6. Loan: Money lent to customer by banks
7. Over draft: Amount of money by which a bank account is been overdrawn by a customer.
8. Advance: Money paid before the due date.
9. Bank: An institution which borrows money from the public and also lend it to the public.
10. Commercial Bank: Banks designed to lend short term loan and overdraft to their customers.
11. Concept: A term having universal acceptable definition or meaning.
12. Delimitation and limitation: Constraints or problem the research encountered in the course of the research.
13. Population: Totality of all items under study.
14. Primary Data: Data that is made use of by the same person who collected it.
15. Research: Investigation under taking to discover or confirm the existence of something, or to get additional information or knowledge about something.
16. Methodology: Procedure and technique used, including problems encountered in the course of the research.
17. Questionnaire: List of questions in a printed form administered to respondents.
18. Sample: Traction or part of the population taken in a specified, manner.
19. Null Hypothesis: A statistical hypothesis formulated for the purpose of rejecting or nullifying the hypothesis.
20. Oval interview: Face to face interview with the respondent.
21. Respondent: People (Sample of the population) who respondent to the questionnaire or were interviewed.
22. Variable: Any feature possessed by members of a population that differed from one another.
23. Return: The measure of profitability on investment.
24. Ratio: A sample mathematical expression of the relationship of one item to the other.
25. Trend: Time movement in a set of observation taken at specified time period usually at equal intervals.
26. Interest Rate: Rental payment for the use of credit y borrows and returns for parting with liquidity by lenders.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#3000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: THE IMPACT OF INTEREST RATE DEREGULATION ON COMMERCIAL BANKS LENDING OPERATIONS IN NIGERIA (CASE STUDY OF UNION BANK OF NIGERIA PLC)
ABSTRACT
The economy of Nigeria has a lot of structural distortion is the 1980’s. The economy policies pursued prior to 1985 made the Nigeria economy price distortions created by a highly over-valued currency and inappropriate pricing of agricultural and other local products.
The control measure introduced prior to deregulation of the economy were unable to improve the economy positively, instead, that period was characterized by short- supply of industrial inputs. Plant closure, large retrenchment of workers, shortage of goods and price inflation with unfavourable balance of payment.
The Federal Government has pursued vigorously the policy of deregulation of the economy. The structural adjustment programme was designed to attack and remove the Fundamental structural distortions prevalent in the Nigeria economy. Commercial banks should equally anticipate and sensitize itself with the challenges of a deregulated economy.
The major deregulation policies used were deregulation of interest rates structure, introduction of second tier foreign exchange market.
Since the Federal Government is contemplating deregulation as the only paramount solution to the distorted economic structure. The banking Industry (Commercial Banks) need to reposition itself to take full advantage of the gains that might arise from such deregulation. Commercial banks should equally anticipate and sensitize itself with the challenges of a deregulated economy.
APPENDIX 11
QUESTIONAIRE ADMINISTERD AMONG THE BANKING PUBLIC
Dear sir/ Madam,
This questionnaire is part of a research into the impact of interest rate deregulation on commercial banks lending operations in Nigeria
The research is in partial fulfillment of the requirement for the a ward of a Higher National Diploma (H.N.D) In Banking and Financial Department
Kindly read each question and briefly express your opinion, your honest and Unbiased opinion is highly solicited for as they will help me with date will be treated in strict confidence.
Thanks for your cooperation.
NEAMADI CHIGOZIE .M.
TABLE OF CONTENT
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE
1.0 INTRODUCTION
1.1 Statement of problem
1.2 Purpose of study
1.3 Significance and relevance of study
1.4 Scope and limitation of study
1.5 Formulation of Hypothesis
1.6 Research methodology
1.7 Definition of terms
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1. Conceptual framework
2.2. Empirical framework
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Research Designs
3.2 Sample size
3.3 Source of Data
3.4 Data Collection Method
3.5 Technique of Data Analysis
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Data presentation
4.2 Data Analysis
4.3 Test of Hypothesis
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of general findings
Conclusion
Recommendation
Bibliography
Appendix- Questionnaire
CHAPTER ONE
1.0 INTRODUCTION
The economy of Nigeria had a lot of structural distortions in the 1980s. The economic policies pursued prior to 1985 made the Nigeria economy vulnerable to external shock. Consequently the 1986 budget sought to de-emphasized controls and adopted policy measures aimed at expanding the economy resource balc. To attain this goal the 1986 budget at a tone in the structural adjustment programme which was launched in July 1980 with the introduction of structural adjustment programme came to deregulation of the Nigerian economy.
The deregulation policy which the structural adjustment called for is the process by process by which government remove selected regulations in bull-mess or order to encourage the efficient operation of market.
The theory is that fever regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower price overall. The deregulation policy was deigned to.
i. Restructure and diversity the productive base of the economy in order to reduce dependency on the oil sector.
ii. To achieve focal and balance of payment viability.
iii. To lay the basis for sustainable non- inflationary or minimal inflationary growth rate.
iv. To lesion the dominance of unproductive investment in the economy, improve the sectors efficiency and intensity the growth the sectors efficiency and intensity the growth potential of the private sector. The listed aims are not exhaustive.
The banking industry which is a major instrument through which government execute their policies, need to appropriately reposition itself to take full advantages of the gains that might arise from deregulation, as well as face the challenges.
Deregulation of the economy will definitely prose some challenges to the banking industry. However the ability to copy with the challenges which will come in the form competitive lending rates, effective management of credit risk, level of expertise in investment banking and cooperate finance activities will all be the important determinant of success for banks.
As a financial intermediary, commercial banks are expected to witness an increase in credit request with concessionaries interest rate. This is as a result of high rate of return that is expected from deregulation of the economy, especially toward deregulation of petroleum products which will definitely attract investors. This is where in the banking industry come in.
The project will therefore aim at analyzing the effect the deregulation of the economy will have on activated of commercial banks.
1.1 STATEMENT OF PROBLEM
Due to the underdeveloped nature of Nigeria banking system it is sometime said that banks have not met the standard expected to them in the process of economic development especially with the introduction of deregulatory policy. There are many problems which the commercial bank is not exception some of the problem to be treated in the text which of course threatens the financial performance of commercial banks are as follows.
The reluctant competition between commercial banks as a result of the deregulatory policy and the possibility of bank failure which prompted the Federal Government to establish the Nigeria Deposit insurance corporation.
i. Ability to cope with the high demand for bank loans with competitive lending rate.
ii. The level of expertise in investment banking and corporate finance.
iii. Ability to effectively manage credit risk these with other problems threatens the financial performance to commercial bank due to the introduction the deregulation of the economy.
1.2 PURPOSE OF THE STUDY
The general purpose of this study is to examine the performance of commercial banks under a deregulated economy with a view of assessing, the effect, challenges, and benefits as well as achievement such deregulation will pose on commercial banks.
This study attempt to critically identify and analyze the impact of government deregulation of the economy on commercial banks with the aim making useful recommendation son how to improve commercial bank performance.
Emphasis will also be made on the current banking practices and habit as means of battling with the challenges and the threats deregulation has brought with it. Also to identify the various achievements made with the inception of the policy as well as to examine how effective commercial banks have been since the inception of the policy.
Furthermore this text will try to compare the activities of commercial banks under the system of regulation and deregulation and deregulation in order to know if the main objective of the policy is been achieve. Recommendation that will enhance the efficiency of banks operations will equally be made.
1.3 SIGNIFICANCE AND RLEVANCE OF THE STUDY
The findings of this work will contribute to knowledge in the subject matter, other researcher students and the entire public will hopefully benefit from this study since it will form the basis for other research for other research work.
1.4 SCOPE AND LIMITATION OF THE STUDY
This study will cover a period of four year period (2000-2004) and a case study approach using first Bank Plc will be adopted. This project will concern itself with the financial performance of commercial banks as measured by a study of the effect of economic deregulation of the various activities of commercial banks.
In order to obtain a broader picture of the effect the deregulations of the economy have on commercial banks. Question arises will also be administer on some other selected banks, in Owerri.
However emphasis on the research will be based on First Bank of Nigeria Plc Owerri
The study will be constrained by the following:
i. The policies and conventions employed by first banks of Nigerian Plc will not necessary be the same as those used by other banks.
ii. The deregulation policies as used by the Federal Government through central bank of Nigeria on a regular basis. There is the possibility that not all policies will be available for this study.
iii. Lack of access to computation and compulsivity of handling multivariate data analysis may pole the greatest problem for the study.
Due to the time limitation and financial constraint it will not be possible in visit more than three commercial banks with concentration on first Bank of Nigeria Plc Owerri.
1.5 FORMILATION OF HYPOTHESIS
The following hypothesis will be tested.
i. The deregulation of the economy resulted in an upsurge I n the number of commercial banks in the country.
ii. The deregulation of the economy has resulted an increase in commercial banks profitability.
iii. Deregulation of the economy has led to a shape increase in banks bad and doubtful dept.
The research shall restrict itself with the use descriptive hypothesis. The null and alternative hypotheses which are normally used in statistical testing will be use, with null hypothesis represented as Ho and alternative hypothesis represented by H1.
1.6 RESEARCH METHODOLOGY
The research methodology will involve the collection of data through oral interviews to top management staff of some commercial banks, namely spring bank guarantee truest bank first ban al in Owerri.
Questionnaire will also be administered to the staff of there banks s well as the use of their financial statement. The researches will analysis the banks records from 200-2004 (A period of form years) both years inclusive.
The research will adopt the case study approach in its analysis and First Bank of Nigeria Plc, Owerri branch will be used as the case study. Major analysis will be based on information received from First Bank Plc, Owerri branch.
1.6 DEFINITION OF TERMS
1. Collateral: An item of value demanded by banks as security for loans granted to customers.
2. Credit: Money created by commercial banks through the media of loans and discounts granted to customers.
3. Data: Any kind of information (numerical or non- numerical) relevant to research.
4. Data Analysis: Critical examination of data with explanations and interpretations of research data.
5. Interview: Discullion or conference between two or more people either buy face to face or through a medium such at telephone.
6. Loan: Money lent to customer by banks
7. Over draft: Amount of money by which a bank account is been overdrawn by a customer.
8. Advance: Money paid before the due date.
9. Bank: An institution which borrows money from the public and also lend it to the public.
10. Commercial Bank: Banks designed to lend short term loan and overdraft to their customers.
11. Concept: A term having universal acceptable definition or meaning.
12. Delimitation and limitation: Constraints or problem the research encountered in the course of the research.
13. Population: Totality of all items under study.
14. Primary Data: Data that is made use of by the same person who collected it.
15. Research: Investigation under taking to discover or confirm the existence of something, or to get additional information or knowledge about something.
16. Methodology: Procedure and technique used, including problems encountered in the course of the research.
17. Questionnaire: List of questions in a printed form administered to respondents.
18. Sample: Traction or part of the population taken in a specified, manner.
19. Null Hypothesis: A statistical hypothesis formulated for the purpose of rejecting or nullifying the hypothesis.
20. Oval interview: Face to face interview with the respondent.
21. Respondent: People (Sample of the population) who respondent to the questionnaire or were interviewed.
22. Variable: Any feature possessed by members of a population that differed from one another.
23. Return: The measure of profitability on investment.
24. Ratio: A sample mathematical expression of the relationship of one item to the other.
25. Trend: Time movement in a set of observation taken at specified time period usually at equal intervals.
26. Interest Rate: Rental payment for the use of credit y borrows and returns for parting with liquidity by lenders.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#10000) into our bank Account below, send the following information to
08139462710 or 08137701720
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) immediately we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
HOW TO IDENTIFY SCAM/FRAUD
As a result of fraud in Nigeria, people don’t believe there are good online businesses in Nigeria.
But on this site, we have provided “table of content and chapter one” of all our project topics and materials in order to convince you that we have the complete materials.
Secondly, we have provided our Bank Account on this site. Our Bank Account contains all information about the owner of this website. For your own security, all payment should be made in the bank.
No Fraudulent company uses Bank Account as a means of payment, because Bank Account contains the overall information of the owner
CAUTION/WARNING
Please, DO NOT COPY any of our materials on this website WORD-TO-WORD. These materials are to assist, direct you during your project. Study the materials carefully and use the information in them to develop your own new copy. Copying these materials word-to-word is CHEATING/ ILLEGAL because it affects Educational standard, and we will not be held responsible for it. If you must copy word-to-word please do not order/buy.
That you ordered this material shows you have agreed not to copy word-to-word.
FOR MORE INFORMATION, CALL:
08139462710 or 08137701720
YOU CAN ALSO CALL:
08068231953, 08168759420
Visit any of our project websites below:
www.easyprojectmaterials.com
www.easyprojectmaterials.com.ng
www.easyprojectmaterial.net
www.easyprojectmaterial.net.ng
www.easyprojectsolutions.com
www.worldofnolimit.com
www.worldofnolimit.com
Tags: THE IMPACT OF INTEREST RATE DEREGULATION ON COMMERCIAL BANKS LENDING OPERATIONS IN NIGERIA (CASE STUDY OF UNION BANK OF NIGERIA PLC)
ABSTRACT
The economy of Nigeria has a lot of structural distortion is the 1980’s. The economy policies pursued prior to 1985 made the Nigeria economy price distortions created by a highly over-valued currency and inappropriate pricing of agricultural and other local products.
The control measure introduced prior to deregulation of the economy were unable to improve the economy positively, instead, that period was characterized by short- supply of industrial inputs. Plant closure, large retrenchment of workers, shortage of goods and price inflation with unfavourable balance of payment.
The Federal Government has pursued vigorously the policy of deregulation of the economy. The structural adjustment programme was designed to attack and remove the Fundamental structural distortions prevalent in the Nigeria economy. Commercial banks should equally anticipate and sensitize itself with the challenges of a deregulated economy.
The major deregulation policies used were deregulation of interest rates structure, introduction of second tier foreign exchange market.
Since the Federal Government is contemplating deregulation as the only paramount solution to the distorted economic structure. The banking Industry (Commercial Banks) need to reposition itself to take full advantage of the gains that might arise from such deregulation. Commercial banks should equally anticipate and sensitize itself with the challenges of a deregulated economy.
APPENDIX 11
QUESTIONAIRE ADMINISTERD AMONG THE BANKING PUBLIC
Dear sir/ Madam,
This questionnaire is part of a research into the impact of interest rate deregulation on commercial banks lending operations in Nigeria
The research is in partial fulfillment of the requirement for the a ward of a Higher National Diploma (H.N.D) In Banking and Financial Department
Kindly read each question and briefly express your opinion, your honest and Unbiased opinion is highly solicited for as they will help me with date will be treated in strict confidence.
Thanks for your cooperation.
NEAMADI CHIGOZIE .M.
TABLE OF CONTENT
Title page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
CHAPTER ONE
1.0 INTRODUCTION
1.1 Statement of problem
1.2 Purpose of study
1.3 Significance and relevance of study
1.4 Scope and limitation of study
1.5 Formulation of Hypothesis
1.6 Research methodology
1.7 Definition of terms
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1. Conceptual framework
2.2. Empirical framework
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Research Designs
3.2 Sample size
3.3 Source of Data
3.4 Data Collection Method
3.5 Technique of Data Analysis
CHAPTER FOUR
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Data presentation
4.2 Data Analysis
4.3 Test of Hypothesis
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary of general findings
Conclusion
Recommendation
Bibliography
Appendix- Questionnaire
CHAPTER ONE
1.0 INTRODUCTION
The economy of Nigeria had a lot of structural distortions in the 1980s. The economic policies pursued prior to 1985 made the Nigeria economy vulnerable to external shock. Consequently the 1986 budget sought to de-emphasized controls and adopted policy measures aimed at expanding the economy resource balc. To attain this goal the 1986 budget at a tone in the structural adjustment programme which was launched in July 1980 with the introduction of structural adjustment programme came to deregulation of the Nigerian economy.
The deregulation policy which the structural adjustment called for is the process by process by which government remove selected regulations in bull-mess or order to encourage the efficient operation of market.
The theory is that fever regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower price overall. The deregulation policy was deigned to.
i. Restructure and diversity the productive base of the economy in order to reduce dependency on the oil sector.
ii. To achieve focal and balance of payment viability.
iii. To lay the basis for sustainable non- inflationary or minimal inflationary growth rate.
iv. To lesion the dominance of unproductive investment in the economy, improve the sectors efficiency and intensity the growth the sectors efficiency and intensity the growth potential of the private sector. The listed aims are not exhaustive.
The banking industry which is a major instrument through which government execute their policies, need to appropriately reposition itself to take full advantages of the gains that might arise from deregulation, as well as face the challenges.
Deregulation of the economy will definitely prose some challenges to the banking industry. However the ability to copy with the challenges which will come in the form competitive lending rates, effective management of credit risk, level of expertise in investment banking and cooperate finance activities will all be the important determinant of success for banks.
As a financial intermediary, commercial banks are expected to witness an increase in credit request with concessionaries interest rate. This is as a result of high rate of return that is expected from deregulation of the economy, especially toward deregulation of petroleum products which will definitely attract investors. This is where in the banking industry come in.
The project will therefore aim at analyzing the effect the deregulation of the economy will have on activated of commercial banks.
1.1 STATEMENT OF PROBLEM
Due to the underdeveloped nature of Nigeria banking system it is sometime said that banks have not met the standard expected to them in the process of economic development especially with the introduction of deregulatory policy. There are many problems which the commercial bank is not exception some of the problem to be treated in the text which of course threatens the financial performance of commercial banks are as follows.
The reluctant competition between commercial banks as a result of the deregulatory policy and the possibility of bank failure which prompted the Federal Government to establish the Nigeria Deposit insurance corporation.
i. Ability to cope with the high demand for bank loans with competitive lending rate.
ii. The level of expertise in investment banking and corporate finance.
iii. Ability to effectively manage credit risk these with other problems threatens the financial performance to commercial bank due to the introduction the deregulation of the economy.
1.2 PURPOSE OF THE STUDY
The general purpose of this study is to examine the performance of commercial banks under a deregulated economy with a view of assessing, the effect, challenges, and benefits as well as achievement such deregulation will pose on commercial banks.
This study attempt to critically identify and analyze the impact of government deregulation of the economy on commercial banks with the aim making useful recommendation son how to improve commercial bank performance.
Emphasis will also be made on the current banking practices and habit as means of battling with the challenges and the threats deregulation has brought with it. Also to identify the various achievements made with the inception of the policy as well as to examine how effective commercial banks have been since the inception of the policy.
Furthermore this text will try to compare the activities of commercial banks under the system of regulation and deregulation and deregulation in order to know if the main objective of the policy is been achieve. Recommendation that will enhance the efficiency of banks operations will equally be made.
1.3 SIGNIFICANCE AND RLEVANCE OF THE STUDY
The findings of this work will contribute to knowledge in the subject matter, other researcher students and the entire public will hopefully benefit from this study since it will form the basis for other research for other research work.
1.4 SCOPE AND LIMITATION OF THE STUDY
This study will cover a period of four year period (2000-2004) and a case study approach using first Bank Plc will be adopted. This project will concern itself with the financial performance of commercial banks as measured by a study of the effect of economic deregulation of the various activities of commercial banks.
In order to obtain a broader picture of the effect the deregulations of the economy have on commercial banks. Question arises will also be administer on some other selected banks, in Owerri.
However emphasis on the research will be based on First Bank of Nigeria Plc Owerri
The study will be constrained by the following:
i. The policies and conventions employed by first banks of Nigerian Plc will not necessary be the same as those used by other banks.
ii. The deregulation policies as used by the Federal Government through central bank of Nigeria on a regular basis. There is the possibility that not all policies will be available for this study.
iii. Lack of access to computation and compulsivity of handling multivariate data analysis may pole the greatest problem for the study.
Due to the time limitation and financial constraint it will not be possible in visit more than three commercial banks with concentration on first Bank of Nigeria Plc Owerri.
1.5 FORMILATION OF HYPOTHESIS
The following hypothesis will be tested.
i. The deregulation of the economy resulted in an upsurge I n the number of commercial banks in the country.
ii. The deregulation of the economy has resulted an increase in commercial banks profitability.
iii. Deregulation of the economy has led to a shape increase in banks bad and doubtful dept.
The research shall restrict itself with the use descriptive hypothesis. The null and alternative hypotheses which are normally used in statistical testing will be use, with null hypothesis represented as Ho and alternative hypothesis represented by H1.
1.6 RESEARCH METHODOLOGY
The research methodology will involve the collection of data through oral interviews to top management staff of some commercial banks, namely spring bank guarantee truest bank first ban al in Owerri.
Questionnaire will also be administered to the staff of there banks s well as the use of their financial statement. The researches will analysis the banks records from 200-2004 (A period of form years) both years inclusive.
The research will adopt the case study approach in its analysis and First Bank of Nigeria Plc, Owerri branch will be used as the case study. Major analysis will be based on information received from First Bank Plc, Owerri branch.
1.6 DEFINITION OF TERMS
1. Collateral: An item of value demanded by banks as security for loans granted to customers.
2. Credit: Money created by commercial banks through the media of loans and discounts granted to customers.
3. Data: Any kind of information (numerical or non- numerical) relevant to research.
4. Data Analysis: Critical examination of data with explanations and interpretations of research data.
5. Interview: Discullion or conference between two or more people either buy face to face or through a medium such at telephone.
6. Loan: Money lent to customer by banks
7. Over draft: Amount of money by which a bank account is been overdrawn by a customer.
8. Advance: Money paid before the due date.
9. Bank: An institution which borrows money from the public and also lend it to the public.
10. Commercial Bank: Banks designed to lend short term loan and overdraft to their customers.
11. Concept: A term having universal acceptable definition or meaning.
12. Delimitation and limitation: Constraints or problem the research encountered in the course of the research.
13. Population: Totality of all items under study.
14. Primary Data: Data that is made use of by the same person who collected it.
15. Research: Investigation under taking to discover or confirm the existence of something, or to get additional information or knowledge about something.
16. Methodology: Procedure and technique used, including problems encountered in the course of the research.
17. Questionnaire: List of questions in a printed form administered to respondents.
18. Sample: Traction or part of the population taken in a specified, manner.
19. Null Hypothesis: A statistical hypothesis formulated for the purpose of rejecting or nullifying the hypothesis.
20. Oval interview: Face to face interview with the respondent.
21. Respondent: People (Sample of the population) who respondent to the questionnaire or were interviewed.
22. Variable: Any feature possessed by members of a population that differed from one another.
23. Return: The measure of profitability on investment.
24. Ratio: A sample mathematical expression of the relationship of one item to the other.
25. Trend: Time movement in a set of observation taken at specified time period usually at equal intervals.
26. Interest Rate: Rental payment for the use of credit y borrows and returns for parting with liquidity by lenders.
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Tags: THE IMPACT OF INTEREST RATE DEREGULATION ON COMMERCIAL BANKS LENDING OPERATIONS IN NIGERIA (CASE STUDY OF UNION BANK OF NIGERIA PLC)
