CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Money deposit banks are resident depository corporations and quasi-corporations which have any liabilities in the form of deposits payable on demand, transferable by cheque or otherwise usable for making payments. The banking sector in Nigeria in 2010 financial year was oligopolistic in structure as only ten banks 11.1% of the 90 operation accounted for 54.5% of total assets, 52.4% of total deposit liabilities and 46.1% of total deposit liabilities of deposit money bank as at 31/12/2006 amounted to #2,705 billion. Whilst aggregate credit to the domestic economy amounted to #1,302.2 billion. In 2006, sectoral allocation of deposit money banks credit continued to favour the less productive sector of the economy as only 40.9% of the total credit went to agriculture, solid minerals, exports and manufacturing down from 46.2% in 2001. In the year 2007, the general performance of banks was not significantly different from what happened in the previous year.
Economic growth has been a major objective of successive governments in Nigeria. In performing the financial intermediation role, it has been argued that by virtue of this function that banks generate economic growth by providing needed resources for real investment (Shaw, 1973; Mckinnon, 1973). Economic growth is one of the important factors that improve living standards in developing countries. It is an indispensable requirement for economic development among other factors. It is believed that the main factors affecting economic growth are labour, capital and exogenously determined technology. Subsequently the new growth theories try to incorporate technology and human capital as endogenous factors. The role of finance in terms of money deposit bank was well acknowledged by researchers. The function of these banks as financial intermediation involves channeling funds from the surplus unit to the deficit unit of the economy, thus transforming deposits into loans or credits. The role of money deposit bank in economic development has been recognized as credits are obtained by the various economic agents to enable them meet investment operating expenses.
Terms of Use: This is an academic paper. Students should NOT copy our materials word to word, as we DO NOT encourage Plagiarism. Only use as a guide in developing your original research work. Thanks.
Disclaimer: All undertaking works, records, and reports posted on this website, eprojectguide.com are the property/copyright of their individual proprietors. They are for research reference/direction purposes and the works are publicly supported. Do not present another person’s work as your own to maintain a strategic distance from counterfeiting its results. Use it as a guide and not duplicate the work in exactly the same words (verbatim). eprojectguide.com is a vault of exploration works simply like academia.edu, researchgate.net, scribd.com, docsity.com, course hero, and numerous different stages where clients transfer works. The paid membership on eprojectguide.com is a method by which the site is kept up to help Open Education. In the event that you see your work posted here, and you need it to be eliminated/credited, it would be ideal if you call us on +2348064699975 or send us a mail along with the web address linked to the work, to eprojectguide@gmail.com. We will answer to and honor each solicitation. Kindly note notification it might take up to 24 – 48 hours to handle your solicitation.