ABSTRACT

The study set out to ascertain the extent to which financial institution have helped in the economic development of Nigeria.  The fundamental issue in Nigeria today is the manner in which it can break away from the grip of poverty and under development one of the objective of this study is therefore the examine to the role of financial institution in development of Nigeria using their bringing together the small scattered saving surplus unit in the country and deficit borrowers for creations since there is an empirical evidence that development can not occur without high availability in the economy. The design show that this research is simply the process of arising at a dependable solution to problem through the planned and systematic collection analysis and interpretation of data.  Sample size and sampling techniques is 124. The strategies random sampling technique was used.  Method of data collection, the interview for collection of more facts and clarification (primary and first hand information). The questionnaires were administered to the bank customers and to the bank staff and management through with a lot of difficulties.  Method of data analysis, for the purpose of this data analysis that follows in this part of the work, the following data analysis tools have been extensively use, we use simple percentage to analyse.  The finding showed that: (i) Low credit availability to potential investors inhibits capital formation in commercial bank.  This was uncompleted agreement (ii) Financial institution have been in the mobilization of saving and channeling such to long-term university. Based on findings it was recommended among other the central bank should release certain policies in other to enable bank grant more long-term loans to investors.

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

The Nigeria financial institutions are integral part of the nation financial intermediation mechanism through which the saving of households’ firms, public corporations and even oversea resident are made available to borrows at home. Financial intermediation channels the fund from the potentials surplus units to potential deficit units quickly, cheaply, safely, and conveniently thereby influencing the overall economic development of the state.

The principal financial institution in Enugu urban financial system may be classified into bank and non-bank financial institutions.  The banking financial institutions include the Central Bank of Nigeria (CBN) Commercial Banks, Merchant Banks, Development Banks.  The Non-Bank Financial Institution (NBFI) on the other hand, include insurance companies, permission funds, National provident fund.  Credit and cooperative society, investment corporations, Discount House Finance Companies, Building societies and Hire purchase companies. There is also the financial market comprising of money and capital markets, where most financial institution operate for the purpose of accelerating financial intermediation thereby improving the liquidity of the economy.

Nigeria economic development depends solely on the activities of financial institution. This assertion is based on the contention that capital accumulation, which is basic pre-requisite for and development take-off, is being financed mainly by the activities and tools of financial institution and its intermediation mechanism.

In view of the above, government has been involved in developmental programmes with aim of increasing a lot of people through a steady increase in per capital income.  Government in a bid to do this has involved itself in different programmes that could evolve a good investment culture in the nation such programmes might aim reducing the interest race so as to stimulate investment of a programme put in place to stimulate savings so that there could be enough advances to investors.  This has been pursued with zeal over the years.

Besides, there have various grants and aids, subsides and the like to so many sectors of the economy to stimulate investment.  They have also tried as much possible to attain stability in every sector of the economy.  However, this has not been easy since the nation has been into a state of economic instability for the past ten years in their quest for the solution to his economic uncertainty, the federal government of Nigeria established various development bank to give long-term advance to investors as a way of encouraging investment and instilling an investment culture in Nigeria business climate.

To appreciate the influence the financial institutions have on Nigeria economy, a Review of the native and function of bank and non-bank financial institution is necessary so that one can place the important aspect of this research work in right perspective.