The Role Of Financial Institution In Enhancing Business Activities (A Case Study Of First Bank Of Nig. Plc Enugu)

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The Role Of Financial Institution In Enhancing Business Activities (A Case Study Of First Bank Of Nig. Plc Enugu)


Financial institution has contributed immensely to the development of the economy of Nigeria by enhancing and playing a significant role in the activities of business in the economy and also contributing to the different sectors of the economy.

In recognition of the important role of financial institutions in development of economy, this project work has been designed to enlighten all interested individuals who may not want to go into one business line or other on the availability of funds for them in any financial institution such as commercial banks like First Bank Nigeria Plc.

The more individual’s ventures into business line, the more developed the nations economy becomes because the development of any given nation is measured by the numerous business activities going on in the nation.

During the course of this study, book and journal were consulted to ascertain the extent to which these financial institutions have actually displayed its role in enhancing business activities and it was discovered that its contributions can never be over emphasized.

Despite the financial institutions achievements so far, recommendations were made to help the performances of these banks so that more people will use the banks available opportunities especially in the area of bank changes electronic banking card product, money transfer services both domestic and abroad, agriculture financial etc.

Chapter One


1.1 Background Of The Study

The stand of economic development is a total sum of all the effective and efficient business activities of the country either home or abroad.

There are vital roles, which the financial institutions have to play in this development. The survival and future of a given nation is hooked on the volume of business activities of that nation, also the availability of fund for financing the activities is necessary.

The main purpose of financial institution is to aid private individuals and government to finance their business projects. Financial institution could be seen as the pillar that causes business activities to progress.

There are financial institutions that deal with physical cash transaction, these institutions are known as banking system for example First Bank Nigeria Plc and there are non-banking financial institutions they complement the activities of the financial institution of business project. These institutions are known as non-banking system. Examples include National Providence Fund (NPF) financial companies, pension scheme, insurance companies, the corporative society, investment companies.

Furthermore, there are various markets that make up the financial institutions.

Foreign exchange Market:

This type of market creates opportunities for foreign exchange for the benefits of investors in carrying out international business.

Liquid capital and money market:

This is where long and short term lending and borrowing instruments are treated by the owners and users of fund.

Stock Exchange Market;

In this market the share of the companies and declared for interested agents to buy. For the main reason for this study, the researcher will be writing on the banking financial institution but before limiting it to the case study, below is a short history of commercial banks in Nigeria.

Commercial Banks In Nigeria (Origin)

Banking business in Nigeria started in 1892 by African Banking Corporation, invited from South Africa. The bank was taken by British bank for West Africa in 1894 now known as First Bank of Nigeria Plc Barelays Bank now known as Union Bank of Nigeria Plc was established in 1917. The two expatriate banks dominated the banking industry or sector until 1933 when National Bank of Nigeria was established.

According to Nwankwo (1980), many indigenous banks were established between 1929 and 1952, but most of them failed dur to poor management, mal-administration, lack of training and motivation apart from low capitalization and stiff competition from foreign owned banks. Only three indigenous banks and two foreign owned banks survived that period. By 1952, the First Bank ordinance was introduced. It stipulated minimum capital base and locating for banks. Soyobo (1991) called the period that followed 1952 to 1959 the first banking boom era.

However, Nwankwo noted that no bank was established in Nigeria between 1962 and 1970, presumably because of the impact of regulations and the civil war (1967 – 1970).

The industry has twelve (12) Merchant Banks and 29 Commercial Banks in 1986, but by December 1990, there were 48 Merchant banks and 58 commercial banks apart from 5 development banks and the people’s bank established in 1989.

First Bank of Nigeria Plc was incorporated as a limited liability company in 31st March 1894 with head office at lever pool. It started business under the corporate name of the Bank of British West Africa (BBWA) with a predecessor, the African Banking Corporation that was established earlier in 1892. This lead to the prominent position, which the bank has to establish in the banking industry in West Africa.

For over a century, First Bank of Nigeria Plc has distinguished itself as a leader banking institution and a major contributor to the economic development of Nigeria.

In the early years of operations, the bank recorded an impressive growth and work closely with the colonial government in performing the traditional function of a central bank such as; issue of space in the West Africa sub-region. It was a progressive system that a branch was opened in Accra Ghana in 1896 so as to justify its West African coverage also in 1898, another branch was open in Freetown Sierra Leone. This operational system marks the beginning of the banks International banking operation.

And in 1900, the bank established second branch in Nigeria and was located in Calabar. Two years later the operation was extended to the Northern part of the Nigeria.

The bank has network coverage of 315 branches throughout the federation including a branch in the city of London and it maintains the largest branch network in the banking industry.

1.2 Statement of the Problems

Banking is a long-term system of which expected funds are committed to enterprises to pay back within a period of time for about twenty years depending on the type of loan. But in the recent past, banks have failed to function effectively in this area and there have been several complaints such as frequent appointment of directors, habits, high staff turnover etc, this has also led many banks into distress, so the researcher wants to find banks into distress, so the researcher wants to find out the causes of the problems and proffer a suggestion.

1.3 Objectives of the Study

The salient objectives of the research were the following among others:

  1. To carry out an investigation on role of financial institutions in Nigeria
  2. To empirically find out the major roles played by banking institutions in combating this societal illness.
  3. To really find out the various types of financial institutions in the country
  4. To determine the benefits that business organisations, banks and government agencies stand to gain in taking charge and in solving the online problem.

1.4 Research Questions

  1. What is the role of financial institutions in Nigeria?
  2. What are the major roles played by banking institutions in combating this societal illness?
  3. What are the various types of financial institutions in the country?
  4. What are the benefits that business organisations, banks and government agencies stand to gain in taking charge and in solving the online problem.

1.5 Significance of the Study

This research work will help the entire economy especially business organizations, the government and other banks in their decision-making as well as help to improve their performance of business activities.

It will also go to a very great extent in helping those that have no knowledge of what banking is all about and all the students in higher institution who are inspiring to know about the subject matter.

1.6 Scope of the Study

This research work covers the specific roles financial institution plays in enhancing business activities in the country and its consequences on the economy of Nigeria using First Bank Nigeria Plc as a case study.

1.7 Limitation of the Study

A research work of this nature cannot come to an end without limitation. The researcher encountered numerous problems, which affected the smooth running of the work. These problems include, difficulty in procuring materials for the project, time factor and financial constraints

Material Procurement

There was a lot of constraints as to getting information and materials for the job. The researcher made series of consultations and visit to most renowned institutions to acquire the needed information. Most materials used were very difficult to come by, as there is no library with the town.

Time Constriants

Combining academic work with circular job is no doubt a thought provoking issue, as it has to do with time. Actually, a lot of time was wasted as the research visited the organisations and individuals together with government agencies to obtain valuable information for the project.

Financial Constraints

The researcher would have obtained more information than what is obtainable here but due to lack of money to visit some of the firms and government agencies located a bit further from the researcher place of resident.

1.8 Definition of Terms


Duty in an undertaking


Concerning money and finance


An institution is an organization established for social, educational, religious etc purposes.


Supporter of business activities or something


The act of carrying out business activities with somebody or an organization.


Programme going on in a particular business

Chapter Five

Findings and Conclusion

5.1 Findings

Through this research, the researcher has been able to discover and established the fact that: financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries.

5.2 Conclusion

Financial institutions provide service as intermediaries of the capital and debt markets. They are responsible for transferring funds from investors to companies, in need of those funds. The presence of financial institutions facilitate the flow of money through the economy. To do so, savings are pooled to mitigate the risk brought to provide funds for loans. Such is the primary means for depository institutions to develop revenue. Should the yield curve become inverse, firms in this arena will offer additional fee-generating services including securities underwriting, and prime brokerage.

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