Evaluation Of Liquidity Assets Management In First Bank Of Nigeria Plc
The language of business is money, and money is the business of financial institutions. No business be it large, medium or small – scale can survive without finance, therefore. Financial institutions should try as much as possible to develop their credit policies, as they are the target sources of finance available to the small – scale enterprises. For many years the importance of small scale industries Vis – a- vis their role in the economic development of Nigeria can never be overemphasized, so their need for long – term finance increase. Inspite of the government’s effort in assisting the development and strength of small-scale industries, the assistance given by the financial institution still remains inadequate.
The major problem confronting small scale industries is as a matter of fact constitute the second major sector in the Nigeria economy that bears most of the burnt of the existing gap in the Nigeria financial system. It is worth reiterating that one of the objectives of the federal and state government is to achieve socio – economic development of the goal cannot be achieve without the development of rural areas, the growth of small – scale industries in the rural areas serves as one of the main vehicle of transforming the nations and the subsequent enhancement of the socio economic growth of the state. Indeed, it has been noted that, usually in programmes of social and economic developments in the newly industrializing countries, small industries play a vital role. Small – scale industries assist the government in creation of employment opportunities, this reduces surplus labour. This tends to reduce urban influx of employment labour. This sector has facilitated rapid expansion and diversification in the industrial sector of the Nigeria economy. The sector is diversified in that not only large industries are relied upon but also small business and that the large industries fail.
The small ones could be made to produce and render the service required. It is worth nothing that though these small-scale enterprises are small in nature, they have a definite function to place in our economy. For the supply of raw materials and other inputs to the large industries, small and medium enterprises all need to be unturned in the hope that they can grow into large enterprises as new ones rise up to replace them and the old ones continued in the process of economic growth and development. For an objective analysis, interview and questionnaire have been used as research instruments. The interviews were administered to some selected small – scale industrialists. On the analysis it was found out that the role of financial institution to the development of Small – scale industries in Nigeria is inadequate. Consequently, the null hypothesis is accepted. Finally, some useful recommendation as to improving the assistance of financial institutions to small-scale businesses have been advanced.
Table of Contents
- Title page
- Table of contents
- 1.1 Background of the Study
- 1.2 Statement of the Problems
- 1.3 Objectives of the study
- 1.4 Research hypothesis/questions
- 1.5 Significance of the study
- 1.6 Scope of the study
- 1.7 Historical Background of Case Study
- 1.8 Definition of Terms
2.0 Literature Review
- 2.1 Organizational structure of the study
- 2.2 Historical Development of Nigeria Banking Sectors
- 2.3 Definition and Classification of Small – scale Industries
- 2.4 The Functions of Commercial Banks in the Development of Small – Scale Enterprises in Nigeria
- 2.5 Types of financing for Small – Scale enterprises both banking and non banking sectors
- 2.6 Sources of finance for small – scale enterprises
- 2.7 Problems of financing in small – scale industries
- 2.8 Capital market
3.0 Research Methodology
- 3.1 Introduction
- 3.2 Population and sample size
- 3.3 Sampling techniques
- 3.4 Sources and methods of data collection
- 3.5 Methods of data analysis
- 3.6 Justification for the choice
4.0 Data Presentation, Analysis and Interpretation
- 4.1 Introduction
- 4.2 Data Presentation
- 4.3 Data Analysis and Interpretation
- 4.4 Testing of Hypothesis/Questions and Interpretation
- 4.5 Summary of findings
5.0 Summary, Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Limitations of the Study
- 5.4 Recommendation
Banks have been accused of taking two much risk in unexpected new environments and lines of business. The advice being given is for the banks to avoid further in exposure by threatening to move tradition that will understand the activities banks, however are being charged by their shareholders to maximize holder’s wealth overtime. To achieve this goal, banks must search out for opportunity in the financial market and loan to manage risk by implementing more systematic system of risk control. At present it appears appropriate to develop specific management control mechanism for each new risk element.
The system being designed by bankers is in contrast one that allows each new form of risk to a new element in an overall analytic area of banks. This approach requires an informational environment that enables risk managers to analyze all of the risk inherent in a given transaction.
1.1 Background of the Study
The aim of this project writing is to bring out the way in which liquidity asset is managed in Nigeria banks. Most especially first bank Yabubu Gowon Way Kaduna is my case study and the kind of services offered by first banks in the management of liquidity.
The banks engaged in the business of providing adequate service, which are:
- Universal banking services to corporate bodies
- Loans and advances to its customer
- Investment Banking services
- Financial Advisory services to corporate bodies
- Foreign exchange services.
1.2 Statement of the Problems
First bank Nigeria Plc is expected like all other banks to provide quick and efficient services to both customers and interested parties. The banks should know the value of time and try as much as possible to serve its customers in the shortest possible time. This is because, the customers are the business of the bank and that is why they are regarded as assets of the cast and other valuable things deposited to them by its customers. This why each and every paper in the bank is considered as money because it talks about it. One of the functions of banks is to grant loan to customer, so as to assist them to undertake various projects for the development of economic activities in the country. In this aspect both the customers and the bank have the same aim that is to make profit. In other words, to achieve this aims the bank and customers have to perform their duties for the smooth running of the system. In most cases the two side always make things difficult for one another on the part of the honest and firm so as allow the bank form a good reputation and develop good banker – customer relationship.
On the other hand the banking industry is expected under normal circumstances to bring out its activities not only efficiently but also accurately. But this is almost apposite and has led to in looking at the problems of the customers in the banks, it can be seen that the blame is on both sides. Some of these problems are
i. Opening Account:
Accounts are opened by the procedure laid down by the customer who thinks it’s a waste of time don’t know that the banks has to be careful on this sensitive issue. When opening the account that all necessary data is collected from the customer which is be used in payment and all other future transaction.
ii. Cash Withdrawal:
In this, banker has to satisfy himself with the validity of the charges or withdrawal slip (in case of saving account). This can take time which the customer may fee he/she is wasting time. Since it is the duty of the bank is to safe guard all cash under its custody satisfaction is very much necessary.
iii. Obtaining Loan from the Bank:
It is clean principle and natural justices that loan should only by granted with security and the security has to be sufficient enough to cover the debt. In most cases customer ignores the
1.3 Objective of the Study
The purpose of this study is to efficiently and liquidity can be evaluated efficiently and effectively in Nigerian banks in order to guide against bankruptcy: It is also aimed at affecting a concrete control to consumer borrowing of limited resources available to the banks in order to guide against bankruptcy.
It is also aimed at affecting a concrete control to customer borrowing from the bank and efficient management of limited resources available to the bank the management and control.
- From the bank to other parties at the request of customer.
- From customers to the banks
- From the bank to the customers
- To and from other banks including the central bank of Nigeria.
1.4 Research Hypothesis
As a starting point for the research work the following hypothesis were developed.
- Ho: Evaluation of liquidity management in Nigerian banks has always been without problems.
- Hi: Evaluation of liquidity management in Nigerian banks has not always been without problems.
1.5 Significance of the Study
The purpose of this research work is to accomplish the following.
- To ascertain the level of risk in liquidity assets management and how such risk could be eradicated. This project hopefully would be beneficial to the management of First Bank Plc, as well as other Nigerian banks
- To partially fulfill the requirement for the award of national diploma in accountancy
- This project will serve as a basis for further research on this topic
1.6 Scope and Limitation of the Study
All banks and other financial institutional deal in liquidity hence managing liquidity: however this study will concentrate on how Nigeria banks managed liquidity with particular emphasis on first bank Plc. Yakubu Gowon way branch as a case study.
- Uneasy access to the bank relevant document
- Insufficient time due to short period available for the study and during the project writing.
Summary, Conclusion and Recommendation
5.1 Summary of the Study
It has been seen that the business of bank is purely cash management and customer satisfaction whom they refer to as assets. When banks first began, cash generated by shareholders (sales of equity shares) cash changes generally as business goes on the change comes from customer hand like purchases of stationeries, building and machinery are procured as well as other assets of the bank. When all these are done a portion of the cash is usually held in its original liquid form which will be used to generate profit.
This report however, deals with the management and control of liquidity in the banking industry after all allocations would have been done efficient the management staff carry out the affairs of the banks. The general problem affecting cash, management lack of serious attention that is the management of various bans give to it.
Foregoing chapters have been on an attempt to consider various ways in which the bank operates so as to generate as well as satisfy the needs of their customers. In satisfying these needs however, a lot of problems are encountered as highlighted in the first chapter. After identifying the areas in which problems arise a hypothesis is arrived at, therein to find ways of solving such problems.
In order to achieve the aims of the study, for writer collected relevant data using: –
- Interview with management team and operational staff of the bank
- Questionnaire to costumer and staff
The writer was also informed of the banks training centre located at Kaduna where their staff are trained for the betterment of the banking operations.
5.2 Recommendations and Suggestion for Further Study
In other to improve the services of the bank and methods of liquidity management so as to eradicate problems and arrive at the set goal, the writer proposes he following recommendation.
- The poor cash management evaluation system should be reviewed without delay to enables the branch holds only the maximum amount of cash stipulated by the head office to be held over night.
- There is also the need to expand operations and office space because the strength of customers are too much for such a small office to offer, the office is so compacted that some documents would not be found on time when they are needed.
- The welfare of the staff in general should be looked into as to enable enjoy an attractive working conditions in their offices. The atmosphere of the branch is very rowdy and that can lead to loss of interest on the job, the central air condition systems should be placed with new ones because they are due for disposal refreshment should be given from the time to time and suggestions should be provided for the staff to express their views to guide the management team.
- There is a need for more machines for posting ledgers and statements which will head to more accurate posting more staff should also be posted to machine department.
- Customers should be served on the basis of first come first serve.
- Customers should be given proper education on the activities of the bank
- Regular meeting should be held between the management and significant number of customers so as to understand common problems encountered by them.
- The profit of the bank is reflected by the level of operations, it performs in a year or given period cheques set for collection to other banks or branches often take long tine before payment is made it is important that the head office should be given priority to the cheques sent for collected or payment.
5.3 Concluding Remark
The liquidity management is aimed at satisfying the liquidity requirements of any satisfying the liquidity requirements of any establishment for its existence and also utilize liquid cash as an assets, it has been observe however that, first bank Nigerian Plc has an efficient liquid management system. The bank has been found to deviate far from the survey concerning management of its liquid resources. Returns are rendered as scheduled:
The goal of maximization of profit is fully pursued and efficiently achieved.
The auditors of a considerable amount of details checking limits investigation to test.
A management control means practically a continuous internal checking on the staff themselves by means of which the work of the individual is independently checked by other members for the staff. For instance, the bank check in charge of the ledger should not keep or be allowed to have any control over the ledger.
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