SAVINGS MOBILIZATION FAR ECONOMIC DEVELOPMENT IN NIGERIA BANKING INDUSTRY (CASE STUDY OF UNION BANK OF NIGERIA PLC)

SAVINGS MOBILIZATION FAR ECONOMIC DEVELOPMENT IN NIGERIA BANKING INDUSTRY (CASE STUDY OF UNION BANK OF NIGERIA PLC)     CHAPTER ONE INTRODUCTION 1.1     BACKGROUND OF THE STUDY

It is universally acknowledged that the banking including play a catalytic role in t he process of economic growth and development.  This acknowledgement is reinforced by contemporary conceptualism to the effect that banks are a veritable vehicle for mobilizing resources from su7plus units and tempting same to deficit unit. Banks constitute perhaps the most important segment of the financial market and played and a dominate vote in not mobilizing savings, but also allocating them for investment purposes.

          In Nigeria, domestic savings rate is relatively low compared to most other developing counties with the same for capital income level. In the past, investment rates were high and hence there was no problem for raising funds.

          Under the present economic dispensation, the companions or the drive for savings deposit has been stepped up by banks and non- bank financial institutions. It is Hoover not sufficient because the range and type of financial assets available are equally important. There is a wide range of saving instruments offered banks and non – bank financial institutions in Nigeria today.

          However, most of the voluntary and non – contractual financial savings consist of savings and time deposit. Although other types of deposit such as savings certificate, premium savings bonds play any a miner rate, banks and non – bank (Moncial Institutions are today competing strongly among them instruments including additional frame benefits  almost banks are now offering contractual forms of savings aimed at persuading depositors to invest in long term deposits.

          Another area some banks are foreseeing to mobilize funds today is the montage saving: because large number of Nigerians need accommodation of their own but fund it difficult with their meager income. Interest payment a demand deposits accounts has also some positive impact on the propensity to save. Bank have also been allowed by the government to open domaliary  account for Nigerian exporters in which proceed of experts can be paid or saved until when they are needed.  Transaction costs related to operating a new accounts and making deposits and withdrawals are now be coming relatively easier particularly for small savers. There is also the pension scheme which seeks to induce depositors to invest small sums of money over a specified period of time in the hope of receiving a stream of benefits upon reacting the age of retirement.

          Conversely the crisis of confidence in our banks is a great set bank for the banking system.  In the past the majority of those who patronized the banks did so in order to find safer place for their money. And for many years bank in the country were the character of currency store house. But because of the lack of confidence in banks today s sizeable amount of Nigerians keep their currency or cash at home and this marks of most of cash unpaired by the banks. According to withstanding et al (1996:133), this one depositors resulting to cash drains. In the broadcast sense a cash drain refers to any kind of cash loss suffered by a bank.

          This winders the financial intermediaries function of intermediation. Most of our industries depend on commercial bank assistance in form of overdraft short term and long loans for effective operation.

1.2            STATEMENT OF PROBLEM

Income posses the greatest constraint to savings mobilization. The generally low level of income among the people in Nigeria is a limiting factor to savings mobilization. The inadequate banking facilities in the economy in general and the rural areas in particular also constitute on obstacle to wide savings mobilization.

          Growing frequency of incidences of found, insider abuses and malpractice which all combine in on unholy alliance to erode public confidence in financial institutions and do painful  damage to whatever level of banking habit has been developed.

          Another factor that may affect savings mobilization is the absence of affective a realistic interest rate policy that rewards savers with adequate return on their savings. It  is argued that in as mush as the rate of interested adjusted for inflation various negative. Savings are likely to remain low. Perhaps the greatest problem in this country is that we run a cash economy. The handers the financial intermediaries from performing their functions. The practice constrains banning systems ability to mobilize funds with the consequence that banks create small mount of  deposit in comparison to amount demanded as loan by the economy.

1.3            OBJECTIVES OF ITS STUDY

The aim of the study is to examine available ways of achieving greater mobilization of savings and its efficient and effective channeling for economic growth the research aims at .

Recommending measures for improving greater mobilization of domestic resources in our bank. Identifying the means throughout which the mobilized funds can effectively which the channeled to the growth and development of economy. Identifying the effect of interest rate mobilization of domestic savings.                                                Identifying the effect of bank distress in deposit acquisition.

Determining the effects of income earned to savings mobilization.

1.4            RESEARCH QUESTION

(1)             Has there been an improvement measure towards achieving greater dogmatic resources in our bank?

(2)             Does the mobilization of domestic savings contribute in the economic growth of the economy?    

(3)             Does the interest rate charges on the mobilization of domestic savings positive? 

(4)             Does the bank distress syndrome have any significant effect to the deposit acquisition?

(5)             Does the propensity to save income earned have effect on the mobilized savings of the bank?

1.5            RESEARCH HYPOTHESIS

To determine the validity and volubility of the information gathered the following hypothesis were formulated.

(1)     H0:    There has been no improvement measure towards   achieving greater domestic resources in our bank

H1:    There has been improvement measures towards achieving greater domestic resources in our bank .

(2)     H0:    The mobilization of domestic saving and development of the economy.

          H1:    Mobilization of domestic savings does contribute in the growth and development of the economy. 

(3)     H0:    The interest rate has no positive effect to the mobilization of Domestic savings.

          H1:    The interest rate has a positive effect to the mobilization of domestic savings.

4.       H0:    The bank distress has no significant effect to the deposit acquisition. 

5.       H0:    There is no significant relationship between income earned of the people and the mobilization of domestic savings by the bank.      

          H1:    There is significant relationship between income earned of the people and the mobilization of domestic savings by the bank. 

          H1:    There is significant relationship between income earned of the people and the mobilization of domestic savings by the bank. 1:Hh

(Iii)    H0:    There is no significant relationship between the mobilization of domestic savings and economic development.

          H1:    There is a significant relationship between the mobilization of domestic savings and economic development.

1.6            SIGNIFICANCE OF THE STUDY 

This study intends to elicit body of knowledge and understanding of the problem of mobilizing domestic savings by banks. It is expected. That of the recommendations of this research are implemented it will help to change the banking habits of people. It will also help the managers and staff of banking industry in Nigeria to improve on their fund mobilization strategy.   

          Researchers / students, lectures and the generated public will also fund the findings and recommendations of their research of value various interest areas, especially those who may wish to carry out further study on the topic in any other relate filed.  

1.7            SCOPE LIMITATION AND DELIMITATIONS

There study examines the mobilization of domestic savings for economic growth and development. The study covers on the need for mobilizing domestic savings, the strategies employed by banks in mobilizing these savings and the problems associated with the mobilization. It also takes a general view on the ways of improving greater mobilization of domestic resources by the bank which all in turn enhances economic growth.

          The researcher broadly examines the research topic as a whole and  then narrowed it down on the effort of the union bank of Nigeria PLC in mobilizing these domestic funds certain constraints were encounter by the researcher during this study they include :-

TIME: -      Time was a major constraint, bearing in mind that the work had to be handled done side other academic responsibilities of the researcher and coupled with the short time required to submit this work due to a very short semester. 

FINANCE  This was another factor as the researcher funds the cost of gathered and analyzing information (both primary and secondary, costs of typesetting, photocopying materials and binding and other expenses necessary for the effective completion of this  work to be too exorbitant.

1.8            DEFINITION OF TERMS

SAVINGS:          This is that part of income that is not consumed immediately but deferred for investment or future consumption.

DOMESTIC SAVINGS:  This consist savings from the citizens of the country and not from foreigners.

CBN:          Central Bank of Nigeria the apex financial institution in the country.

NIGERIAN BANKING INDUSTRY: This countries of the banking institutions in the country which include the commercial banks, Merchant banks, development banks etc. with the control Bank at the Apex. 

UNION BANK OF NIGERIA PLC: This is of the leading banks in the country both by deposit and assets wish 283 branches touching.

BANKER:  A banker could be send to be one who works in on institution licensed to carry on the business of banking.

DEPOSITORS:   These are bank customers who keep money  or value with the bank on contractual terms.

DISTRESS: A bank may  be classified distress when it is unable  to meet the bank examination rating system.

BOFID:      Banks  and other financial institutions Decree. project topics   final year project topics and research materials 

RURAL BANKING :   This involves the establishment of banks in rural areas to cultivate banking habit among the rural dovellers.     

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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

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